Unable to find a buyer for its music subscription business, Yahoo (YHOO) is instead just shutting it down and handing it over to RealNetwork’s (RNWK) Rhapsody; the two companies say they’ll work together in a strategic partnership. No terms were disclosed, but we’ve previously estimated that Yahoo might be able to fetch somewhere between $66 million and $110 million for the unit. Yahoo, which still does quite well with its ad-supported music videos, is working on other offerings that revolve around free music.
The move means that Rhapsody and Napster (NAPS) are the only players in the digital music rental business — for now. That’s because while consumers have yet to embrace the unlimited-music-for-a-monthly-fee model, a new set of players are looking to give it a go. CBS’ Last.fm says it wants to launch a subscription business, and Universal Music Group is trying to round up support from the other major labels for its “Total Music” gambit.
Meanwhile dreamy optimists are still waiting for Steve Jobs, who’s expressed nothing but disdain for the concept, to embrace subscriptions. Fueling their hopes: The fact that Apple’s (AAPL) iTunes now offers movie rentals. We urge them not to hold their breath. We don’t think Jobs has an ideological opposition to selling music subscriptions — it’s just that he doesn’t want to spend time convincing consumers that they ought to do it.
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