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Yahoo undercuts rivals with new music service

Beta service in US is cheapest download yet

Yahoo plans to launch a trial version of Yahoo Music Unlimited, its new, aggressively-priced online music subscription service.

For an introductory price of $59.88 (£32) a year, or $6.99 (£3.73) when paid monthly, the service will give users access to over 1m songs from all major record labels and most independent labels, Yahoo said in a statement.

With its pricing, Yahoo is undercutting rivals RealNetworks and Napster, which both charge about $15 (£8) a month for comparable services. Apple's iTunes, the biggest online music store, doesn't offer subscriptions but charges users per song or album download.

Yahoo will offer tracks in Microsoft's Windows Media Audio (WMA) format encoded at 192kbps (kilobits per second), a high quality when compared with other services. Users can also transfer music to digital media players that support Microsoft's latest digital rights management technology.

Digital media players that support the Microsoft technology, known as Janus, include Iriver's H10, Dell's DJ and Creative Technology's Zen Micro. Apple's iPod music players, the most popular digital media players, don't support Microsoft's technology.

Subscription services such as Yahoo's, Real's Rhapsody and Napster's offer access to music transferred to portable devices as long as the user maintains his subscription. The tracks become unplayable when consumers let their subscription lapse.

Yahoo Music Unlimited also will offer songs for purchase for $0.99 a track. Subscribers will be able to purchase and permanently own tracks for $0.79 a piece. Purchased songs can be burned onto a CD, transferred to portable devices and used on a total of five PCs, according to Yahoo.

Yahoo Music Unlimited will be released in beta version first and will initially only be available to users in the US.


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