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In one of the most head scratching tech moves of 2008, Yahoo and Rhapsody announced today that Yahoo will be killing it’s Music Unlimited Service to merge with Rhapsody music - owned by Real Networks, the parent company of Real Player. Real Player has a reputation as one of the most awful media players available, and many technical people will immediately remove it from computers under their control because it can be buggy and a resource hog. Strangely enough, this announcement comes hot on the heals of StopBadware.org’s categorization of Real Player as Badware. Not only will Yahoo Unlimited users possibly/likely be forced to use Real Player, but their monthly price, currently set at a reasonable $9.00 a month, will increase to $15.00 a month after an unspecified trial period. This looks like a lose-lose proposition for Yahoo Unlimited music users.

Here’s an excerpt from Rhapsody’s release:

“Yahoo! (Nasdaq: YHOO) and Rhapsody® America, the award winning digital music service of RealNetworks® (RNWK) and Viacom’s (NYSE:VIA and VIA.B) MTV Networks, today announced a broad strategic relationship in digital music. Rhapsody will be the exclusive on-demand music service for Yahoo!, replacing Yahoo! Music Unlimited. Yahoo! and Rhapsody also intend to collaborate on other digital music services such as music downloads.”

Writing about the decision this morning on Yahoo’s blog, Ian Rogers explains the decision:

“Last year, shortly after I assumed the role of Yahoo! Music’s General Manager, we started saying publicly that we were “de-emphasizing” our premium music offering, Yahoo! Music Unlimited. The fact of the matter is that building a great premium music service takes a huge amount of resources and effort, and it was taking energy away from our important main offerings, music.yahoo.com (the Web’s #1 Music destination), music videos, and LAUNCHcast Radio….As a result, we’re pleased to announce Rhapsody as our exclusive partner for on-demand music. Yahoo! Music Unlimited subscribers will have a chance to easily take their music catalogs and migrate to Rhapsody” Source (click here)

Maybe it’s just me, but he sounds quite apologetic here. Uh gee, I’m sorry to report that we’re handing our Unlimited business off to Rhapsody - I know we’re a multi-billion dollar company, but we just don’t have the resources to keep this music thing going, and maybe these other guys do. Ian then goes on to spend most of his blog post focusing on the acquisition of Foxytunes, which produces a nice little media toolbar, but as announcements go - this one is not in the league of the Rhapsody/Yahoo one.

Wow - this seems like such a bad move, and so far user reaction tends to agree with this. A Yahoo Unlimited customer named Aaron, commenting on Roger’s post, writes, “I am very disappointed in in Yahoo and their decision to drop their music engine. I have loved this product and yahoo throughout the past few years. I have been a very loyal customer. Due to Yahoo’s decision I will never use the search engine or its products again.” Source Troy, commenting in the same post writes, “Well thanks alot for throwing away a perfectly good music player & service…. Now you’re gonna just drop out all together. Typical big business - don’t give a $%^@ about the customers.” And finally, RickyF writes, “I will not be coming along for the ride. I did not sign up with Rhapsody. I purchased Yahoo and don’t want to be “sold”. I suspect that I am not alone in this feeling of betrayal…But for me it is bye-bye Yahoo Music and hello Amazon MP3 downloads.” Source Surely this negative reaction can’t be a huge surprise to Yahoo, can it? To Yahoo’s credit, Rogers reports that those customers who don’t want to switch to Rhapsody will be given a refund, and Rogers seems like a stand up guy…this decision was likely made above his head.

Could this be a poison pill to encourage Microsoft to back off? Actually, I am jesting a bit there, but in truth, I imagine that this will be a bitter pill to swallow for Yahoo’s loyal users - especially coming on the heals of this week’s announcement that Microsoft is trying to purchase Yahoo. I am curious how much these two announcements will impact brand loyalty to Yahoo. I realize that the Microsoft buyout might not entirely be their fault, but it’s really surprising to see them merge with a company like Real, who has such negative connotations in certain tech spheres.

Finally -to those who wonder why this news might be viewed negatively, read this information from StopBadware.org (sponsored in part by Google, by the way) on Real Player:

We find that RealPlayer 10.5 is badware because it fails to accurately and completely disclose the fact that it installs advertising software on the user’s computer. We additionally find that RealPlayer 11 is badware because it does not disclose the fact that it installs Rhapsody Player Engine software, and fails to remove this software when RealPlayer is uninstalled. We currently recommend that users do not install the versions of RealPlayer software that we tested, unless the user is comfortable with the software behaviors we identify or until the application is updated to be consistent with the recommendations contained in this report.  

Software does not fully, accurately, clearly, and conspicuously disclose the principal and significant features and functionality of the application prior to installation (guideline II.A.a.iii.) The advertising software bundled with RealPlayer is misleadingly called a ‘message center’, and is described incompletely and inconspicuously in the EULA as software designed to provide useful software updates. When RealPlayer 10.5 is installed, the advertising features of this ‘message center’ are enabled by default for users who choose not to register their personal information with RealNetworks after the software is installed.
Software which installs deceptively (guideline III.A.)RealPlayer 11 does not disclose that it installs Rhapsody Player Engine, and does not remove this software when RealPlayer is uninstalled. Users are not informed by the installer or uninstaller of the connection between RealNetworks and Rhapsody Player Engine.

Source: Stopbadware.org 

Thanks for reading!

/Chase