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Tuesday, April 7, 2009

Yahoo revamps its music site

By Troy Wolverton

Yahoo is opening up its music site, allowing users to access content and buy songs and other items from a range of providers.Beginning today, consumers who visit the artist pages on Yahoo Music will be able to gain access to music videos stored on YouTube, listen to Internet radio streamed from Pandora or buy songs from iTunes. Users will be able to customize how they view the artist pages, moving preferred services or content higher on the page and removing ones they don't use at all.

The move is the latest in Yahoo's ongoing renovation of its music site. Although Yahoo Music is one of the most heavily trafficked music sites, it faces a tough challenge from up-and-coming sites such as MySpace, which has become the online home for many bands and their fans.
In recent years, Yahoo provided a range of paid or proprietary features, including selling music and offering its own Internet radio service. But now it's betting that it can better compete against MySpace and other music sites by getting back to its roots as a conduit to information and services provided by other companies.

"Yahoo's been talking a lot about having an open strategy. This is our play in music to do that," said Michael Spiegelman, general manager for Yahoo Music. "We want to be the starting point" for music fans.Yahoo's new strategy has potential, said Mike McGuire, a media analyst at Gartner, a technology research firm. But it would have had more promise 
Advertisementseveral years ago, before consumers' music habits had formed, he said.

If consumers now go directly to iTunes to buy music or to Ticketmaster to buy tickets, it's uncertain they will want to go to a site like Yahoo Music first, McGuire said."It's going to be tough," he said. But noting that Yahoo has huge traffic, McGuire added: "If they can funnel it into Yahoo Music and provide a value that's unique, then there is room for it."The relaunch of the artist pages on Yahoo is the latest in a series of changes to its music site. Last year, the company closed its subscription music service, choosing instead to direct customers to RealNetworks' rival Rhapsody service. In February, Yahoo shut down its personalized Internet radio service in favor of a partnership with CBS.

Although Rhapsody and CBS will continue to get preferential treatment on Yahoo Music, today's revamp will link consumers to rival services.Later this year, Yahoo plans to allow third-party developers to build widgets — or small modules — to add content or services to its music site. Like MySpace, the company also plans to allow musicians to have areas on Yahoo Music where they can publish information for fans.Spiegelman did not discuss how much money the music site makes for the company. But he did say Yahoo will get a referral fee from companies when customers make purchases on their sites after being directed to them by Yahoo Music. 

However, those commission fees are not the main point of the revamp, said Spiegelman. Instead, the company is trying to make the site more appealing to advertisers by offering something that will encourage consumers to return more often, he said."When you talk to advertisers, they are interested in things that are new and different and innovative," Spiegelman said.

Ultimately, the success of the revamp will be decided by the advertisers, the service providers to whom Yahoo wants to direct traffic and sales, and the bands and music labels who are trying to get word out about their latest songs and albums, McGuire said.

"They need to see the payoff," he said.


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