Portal powerhouse Yahoo has entered the growing field of MP3 music entertainment sites by introducing Yahoo Digital. The site features streaming programming and sells MP3 downloads in partnership with EMusic.com.
The newest Yahoo Net property lets you listen to and download music, and watch music-related Web video broadcasts. Using tools on the site, you can re-mix popular songs from artists such as Luscious Jackson, Moby, and David Bowie. And, starting in September, "Yahoo! Open Mic" will let you submit your personal musical tracks online.
High Speed Profits Afar
Analysts say Yahoo's newfound musical interest is rooted in the unrealized potential of online music sales. The portal also plans to offer rich multimedia content, as people access the Web at higher speeds.
High-speed access to the Internet, through cable modems and digital subscriber lines, is expected to grow rapidly in the next four years. By 2003, 10 million U.S. households will be connected to the Net at high speed, compared with 1.2 million in 1999, according to market research by the Yankee Group.
However, music sales by direct download are not climbing as quickly. Jupiter Communications forecasts $147 million in sales by 2003, below its potential given the growth in high-bandwidth access.
Through Yahoo's partnership with EMusic.com, customers will be able to choose from among 22,000 MP3 tracks, sold online for 99 cents per song and $8.99 per album.
But without major labels like Sony or Universal selling music by mainstream artists over the Net, direct-download music sales will be chicken feed, says Tom Huskerson, an analyst at Zona Research.
The recording industry has been cautious about entering the market, wary of the piracy that occurs from the easy reproduction of MP3 technology. However, the industry is developing a Secure Digital Music Initiative, technology that restricts reproduction and protects copyrights and royalties.
Yahoo Digital also offers eight on-demand video channels, including live and repeat broadcasts of concerts. Its streaming content includes Western, horror, anime (Japanese cartoons), and fashion video feeds. Yahoo plans to add more channels.
This kind of Web-based entertainment is gaining popularity in the music industry and among certain broadcasters.
Yahoo offers the video channels through its Yahoo Broadcast Services, formerly known as Broadcast.com, which Yahoo acquired in April for $4.9 billion.
EMusic has also signed marketing deals with America Online's ICQ, Spinner, and WinAmp to sell its music online. EMusic and Yahoo will compete with MP3.com and Diamond Multimedia's RioPort music portal.
Lycos, Microsoft, and RealNetworks are also jockeying for position in the nascent online music market. Other Yahoo partners include Liquid Audio and Beatnik.