Walt Mossberg

Yahoo, RealNetworks Offer New Alternatives To Apple iTunes Model

In the quest to break Apple Computer’s grip on the legal online music market, the best approach has seemed to be to try an entirely different model. Instead of selling individual songs outright for 99 cents each, as Apple does, some other companies are renting songs to users who pay a monthly subscription fee.

But the subscription services have had trouble gaining any real traction. So two big players, Yahoo and RealNetworks, are taking interesting steps to change the game. Yahoo has introduced a new service that’s priced at just a third of what competing rental services charge, and Real is offering some music free to entice new customers.

I’ve been testing these two new services, and of the two, I strongly prefer the new Yahoo Music Unlimited to Real’s revamped Rhapsody service. Yahoo’s offering is bolder, and it works much better. In fact, even though it is still in a beta, or test, phase, I regard Yahoo Music as the new champ among subscription services. Whether it can dislodge Apple is another matter.

The upside of the subscription model is that customers can fill their computers and portable music players with vast quantities of songs for much less money than it would cost at Apple’s online iTunes store.

But there are big downsides to the rental model. First, all the songs you ever downloaded will die and become unplayable if you stop paying your monthly subscription anytime in the future. Second, the subscription fees — $15 a month currently — are pretty stiff, especially for younger users. Third, the rental services are far more complicated than iTunes, because they sell several categories of songs, with different rules for using them, and offer multiple subscription plans with different privileges.

Finally, the songs you rent from the subscription sites won’t play on the world’s favorite and best portable music players: Apple’s iPod models. The rental sites are all built on underlying Microsoft software that doesn’t work on iPods.

Yahoo Music Unlimited is accessed through a new, free, music jukebox program called Yahoo Music Engine. You can get a whole year of the service, including the right to download rented songs to a portable player, for an annual payment of $60. That’s just a third of what competing services typically charge. If you prefer to pay monthly rather than annually, it costs $6.99 a month, which is still less than half of the typical $15 monthly fee.

In my tests, I found the Yahoo service simple and easy to use. Signing up with my credit card was a snap, as was downloading and installing the program. If you are a subscriber, you can buy nonexpiring songs outright for just 79 cents on top of your monthly or annual fee.

The software itself is straightforward. Unlike many other iTunes competitors, the Yahoo program doesn’t require you to switch to a different screen to see the progress of song downloads. As in iTunes, a progress bar is visible no matter what’s going on in the main window.

I downloaded a bunch of rental songs, and transferred them to a compatible music player, the iRiver H10. The Yahoo software immediately recognized the player. The first transfer attempt stalled, so I had to quit the program and restart. But then the transfer went flawlessly. The company promises to fix that problem before the software is final.

Yahoo has other nice touches. It lets you easily personalize the service, so you mainly see music and artists that match your tastes. And if you use Yahoo’s instant-messaging service, you can actually see, and play, the songs on a friend’s Yahoo Music account. If you like them, you can download your own copies instantly. I tested this, discovered an artist named Shuggie Otis in someone else’s collection, and snagged some of Shuggie’s tunes for myself.

Unlike the Yahoo offering, Real’s new Rhapsody service and player aren’t in the test stage. But they gave me far more trouble than Yahoo did. And Real’s prices are much higher, at $180 a year, compared with Yahoo’s $60. Buying non-expiring downloads costs 89 cents, versus 79 cents from Yahoo.

Rhapsody does have one major new feature. It gives nonsubscribers 25 free “streams” of music a month, which is a novelty in the business.

But the new Rhapsody jukebox program, needed to access the service, just wouldn’t work properly in my tests. On an HP Pavilion, it crashed and froze so often that it was unusable. So I installed a fresh copy on a second machine, an IBM laptop.

This time it ran OK, but I had trouble transferring music to the iRiver H10 portable player. It refused to transfer seven of the 20 songs I tried to move over, giving me two different error messages.

A big part of the transfer problem probably lies at the feet of Microsoft, whose digital-rights software has proved clunky in my tests in the past. But Yahoo uses the same Microsoft software underneath the covers, and had no trouble with it at all.

So if you have a spare $60 this year, you want to try renting music, and you don’t have an iPod, Yahoo is the way to go. If you love your iPod and want to collect music whose longevity doesn’t depend on paying a subscription fee years into the future, stick with Apple.

Write to Walter S. Mossberg at mossberg@wsj.com.


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