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Yahoo! to have "modest near-term impact" on Apple

updated 04:45 pm EDT, Thu May 12, 2005

Yahoo impact

Banc of America Securities today said the launch of a new paid music download service from Yahoo! will "have very . Banc of America slightly lowered the target price on Apple (to $44 from $47.50) "to acknowledge the risk of increased competition in the MP3 market, with a focus on 2006." The tight integration between iTunes and Apple's hardware has had a "protective effect," according to the report, with a strong connection between iPod and iTunes sales. If the subscription model proves to be popular, the firm said it expects Apple to counter and match with a subscription model of its own, echoing comments made by PiperJaffray.

by MacNN Staff

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benhur
Fresh-Faced Recruit

Joined: Jan 2001

0

05/12, 06:08pm | report spam | close Reply |
should get interesting

I didn't think Apple would explore a subscription service unless it had to. Now it has to. If the Yahoo service worked on a mac I'd do it right now. It's a very well priced service and if you still wanted to buy your songs you could. Kudos to yahoo for being so bold. Your move Apple.

mugwump
Junior Member

Joined: Feb 2000

0

05/12, 06:16pm | report spam | close Reply |
huh?

Apple has never claimed any profit from the online music store. Why they have a lowered forecast if people are looking at other music stores is beyond me. You may as well say that there are rival mp3 software as well that could hurt iTunes domination.

The iTunes store, software, and iPod is where it's at, and it's not about any of them individually.

klinux
Senior User

Joined: Jul 2002

0

05/12, 06:23pm | report spam | close Reply |
Sigh

"Why they have a lowered forecast if people are looking at other music stores is beyond me."

Geez, the article explained it!

If people tried and liked Yahoo! Music and they will want a digital audio player that works with it and which means no iPod. However, Apple's excellent hardware and integration will ameliorate such a move if it happpens hence the modest impact and small change in target price.

olePigeon
Clinically Insane

Joined: Dec 1999

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05/12, 07:21pm | report spam | close Reply |
Why do they call it...

Sorry, but if I pay for something I want to own it. I also don't want DRM crippled Windows Media Files that can carry trojans and viruses inside the container.

jhorvatic
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Joined: Apr 2005

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05/12, 07:35pm | report spam | close Reply |
I don't want to rent

I aggree with the last post. I don't want to rent my music I want to own it. Besides Apple is still the only online music store that offers music to both Mac and PC's. Yahoo is just another Roxio,Napster,Rhapsody,Microsoft store. Pay over and over and over for the music you could have bought outright once at iTunes and use the best player on the market to boot.

kw99
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Joined: Nov 2001

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05/12, 07:55pm | report spam | close Reply |
Nonsense...

iTunes Music Store sales has little impact on Apple's earnings (maybe more on overall revenue, but not earnings). The only way this Yahoo offering can impact Apple financially is if it makes people buy a non-iPod device, just so they can use the Yahoo service. If Napster and Real did not significantly impact Apple and iPod sales, why would another player (in that already small subscription piece of the music download pie)?

The only reason Apple would consider offering a subscription music service is if iPod sales are impacted. If not, Apple is not going to do it. Apple should focus on making the best music players in the world, and the iTune Music Store will toast the so-called "competition."

If there is impact on iPod sales, then Apple offers its iPod-only subscription service, and the rest of the subscription players are truly dead meat.

klinux
Senior User

Joined: Jul 2002

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05/12, 08:14pm | report spam | close Reply |
Agree with olepigeon

Agreeing with OP is not a smart move. Why is that? Let's break down his argumentm shall we?

"Sorry, but if I pay for something I want to own it."

Have you ever rented an apartment? Leased a car? Paid for cable/satellite? Has it ever occurred to you that you are paying for a service? Like a right to access a catalog of a million songs? Did you not read that you can burn tracks too? What is so sacrilege about say, owning a 1984 Def Leppard cassettee, so make you want to own it?

"I also don't want DRM crippled Windows Media Files that can carry trojans and viruses inside the container."

But DRM crippled AAC file is OK? Have you considered maybe others are forced to go with WMA because Apple will not license FairPlay?

In addition, there is no documented case of a commerically DRM'ed WMA/V file carrying trojans or virus. Sure, while a WMA/V files can be malformed and trigger buffer overflow but so can Quicktime as well. In either case, they have been found in lab settings rather than being in the wild.

Lastly, no one is forcing you to rent music. But posting everytime this issued is raised with "But I don't want it rent and I don't understand why blah blah' is getting kind of lame.

benhur
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Joined: Jan 2001

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05/12, 08:29pm | report spam | close Reply |
re: don't want to rent

Did you even read the article? Yahoo offers both rent and buying. In fact if you are a subscriber, then buying tracks is cheaper.

I like the mixed offering. You mention paying over and over for music. How about paying to listen to the same song over and over.

I see both sides and I think there is room for both. I like that Yahoo is diving in and trying it, hopefully getting Apple to do the same.

I like browsing and listening to new music and songs that I wouldn't have before because I'd have to buy it to listen to it. If I like it that much, I'll go ahead and buy it.

Just wished it worked on an iPod, an FM tuner iPod for that matter.

mugwump
Junior Member

Joined: Feb 2000

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05/12, 11:40pm | report spam | close Reply |
what's best for revenue

Wouldn't Apple offer the services that maximize revenues? I think they already are doing just that.

If they offered a subscription service, they have determined that it would undermine song sales, to the extent that it would remove any thin profits from the music store.

But at some point if the equilibrium tilts away from the current method, then I'm sure they will follow it.

LouZer
Fresh-Faced Recruit

Joined: Nov 2000

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05/12, 11:45pm | report spam | close Reply |
Woohoo!

Its time for the "But I don't want to rent music, I want to buy it" posters to come out and bore us with their preachiness. So come on guys, get to it!

And I mean, I agree with you all. I spend $45 a month on my cell phone bill, and I think I should get calling for life, because I paid for it!

dxtx
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Joined: Mar 2005

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05/13, 01:27am | report spam | close Reply |
rent vs buy

Well, a lot of people feel that, if given the option, it is better to own something rather than rent it. I know a handful of people that are bailing out of their apartment rental situations because they are sick of renting -- they want to own. There are positives and negatives to both sides of this coin.

That said, in my opinion I feel that a lot of the tangible benefit of 'owning' something goes out the window when you start dealing completely in the digital realm of mp3s and wmas and whatever.

There is more of a tangible benefit of owning an album on CD or even vinyl because you get a physical item - artwork, liner notes, something you can touch.

The main problem with 'buy' models for music services like iTunes is, in my opinion, that $1 per song is WAY too much money. It should be more like 50cents. A typical twelve track mp3 album should cost $5-7. If you're upset that a "buy model" doesn't let you experiment with new music, put some of the blame at the completely ridiculous cost.

dxtx

TiDual
Forum Regular

Joined: Nov 2001

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05/13, 04:03am | report spam | close Reply |
Thoughts ...

... surely Apple's stock target price already reflects the fact that major players like Yahoo and MS are coming into the market. Surely the analysts don't wait to read it in the papers ... we always new it was coming. Duh.

As for subscription, well, the jury is still out, but in any case I think it's a somewhat orthogonal market. I'm one of the old-school " I want to own it" ... in fact I don't use ITMS ... I buy CDs and rip'em! However if subscription were cheap enough (and Yahoo! is ... I wonder how they can offer it so cheap!), I could imagine that being appealing ... especially for transient music listening (e.g. on my cell-phone). BTW: what happens in 8-10 years when the subscription model has run it's course, audio formats have moved on, etc. and the services are shut down: are subscribers then faced with a "you lose your entire collection" situation (or, of course, "you can now purchase the songs you want to keep ... say you've got 2500 you like ... just give us $2000 now").

The big barrier for Yahoo is that it only works on maximally 30% of music players (i.e. non-iPod) ... but that's still a big market. The problem for Y! is that they can't be making much profit, and they only have a slice of a fraction of the (non-iPod) market, and they are going to face lots of *direct* competition for that non-iPod market (from MS most noteably). This is good news for Apple ... it'll be fun to watch Y! and MS go head-to-head :-).

To be honest, I suspect Apple will see if the subscription things takes off, and then introduce a similar scheme, with good chances of holding onto their market share. They did this with the shuffle, despite waiting quite a while to introduce a flash player.

My biggest fear for Apple is that the record labels may be conspiring against them (to avoid Apple acruing too much power), and will make it possible to Y! and MS-based services to substantially undercut them.

eldarkus
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Joined: Feb 2004

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05/13, 08:40am | report spam | close Reply |
to klinux

"Have you ever rented an apartment? Leased a car? Paid for cable/satellite? Has it ever occurred to you that you are paying for a service?"

Leasing a car is a lame idea. It may be beneficial in some areas, but for 95% of the population, owning is a better option. Same with renting an apartment. Owning a home is much more beneficial in most cases. Ask any financial advisor and they will agree. Bad analogies. So when someone says "I dont want to rent, I want to own", they are just being financially savvy!

and did it ever occur to you that the reason we rent cable is because WE HAVE NO CHOICE? lol...

and one more thing.. No WMV trojans in the wild??? NOT!!! try doing a google search next time instead of posting bullshit info! So much for research, eh Klinux?? I found that link in 20 seconds.

http://www.pandasoftware.com/about/press/viewNews.aspx?noticia=5818

klinux
Senior User

Joined: Jul 2002

0

05/13, 12:46pm | report spam | close Reply |
el

Hey El, I own my home and own my car, no need to preach to me. However, I also have no debts of any kind, fully invested in my 401K, etc, however, I know not everyone is like that so I don't preach that either song or rent model is the right thing for you but that you should give people choices.

Furthermore, I said commerically DRM'ed WMA/V files i.e. AV files that you purchase. I am well aware of (and did say) that WMA/V files, like Quicktime, can allow execution of malicious code. And if one downlaod random stuff off P2P and other websites, well, there's no one to blame but oneself. But you are correct, I should have been more clearer.

testudo
Fresh-Faced Recruit

Joined: Aug 2001

0

05/13, 12:55pm | report spam | close Reply |
Re: to klinux

Leasing a car is a lame idea. It may be beneficial in some areas, but for 95% of the population, owning is a better option.

Um, that's not true. Since most people have this lame idea that cars should be replaced every 2-4 years, they never get their car paid off before they're buying another one. And depending on the car they're buying, they may not even get to the break-even point.

Same with renting an apartment. Owning a home is much more beneficial in most cases. Ask any financial advisor and they will agree. Bad analogies. So when someone says "I dont want to rent, I want to own", they are just being financially savvy!

Yeah, but not everyone can afford a home. Plus, buying a home when you plan to stay for less than two years isn't beneficial. Depending on what you can afford to buy vs. rent, you may get a better abode. Finally, depending on age of the building, owning can be a very expensive (re: repairs) proposition. In an apartment, you have an AC problem, you call maintenance, they fix it the next day. No charge.

and did it ever occur to you that the reason we rent cable is because WE HAVE NO CHOICE? lol... Sure you do. There's the 'no-tv' option.

What you people always seem to miss is that these subscription services are just like on-demand cable-TV, or streaming internet radio, or XM satellite, with the exception that you get to pick the song list. Do you own the songs? No, but then again, you don't own the songs from XM either. You're listening to music, not gathering it. And $5 for Yahoo is a whole lot cheaper then XM, and you can take the music where you want. When you stop paying, do you 'lose' your music? No. Because you never 'had' it to begin with. You lose the service, the stream, the ability to pick songs you want to listen to. Rather than just ranting on 'renting' music, try thinking 'different' and see these services for what they are, not what you think music is supposed to be about.

iantepoot
Fresh-Faced Recruit

Joined: May 2005

0

05/13, 01:45pm | report spam | close Reply |
Rent vs. Buy

I suppose I qualify as one of 'you people' that don't want access to my favorite tracks dependent on an ongoing subscription. However, that's just a personal preference.

But I think it is the personal preference of a majority of music buyers. We'll see how it pans out. If Yahoo! sets the world on fire with this, then we'll know. But I think some of the arguments for subscription are off the mark in a couple of ways:

1. "The Rent vs. Buy Apartment or House" debate/analogy is meaningless. There's a big difference between buying a 1-7k house (or more) and a $0.99 song. The same considerations and thought process simply doesn't apply.

2. Many of the comments for subscriptions seem to boil down to this idea: 'people don't seem to like this idea. People should then change their perception'.

IF (and I don't claim to know for sure) people don't like this idea, I think the 'consumers are incorrect. They should change what they want' model is part of any sane business strategy. Perception matters -- and if they perceive it negatively, it doesn't matter how much like 'video on demand' or whatnot it is.

If a MINORITY of people DO prefer this, then it is simple: services that offer this will capture a minority market share. And, if done right, that can be OK too. Niche players can thrive without domination -- Apple is was (still is, for CPUs) a prime example for years.

klinux
Senior User

Joined: Jul 2002

0

05/13, 04:47pm | report spam | close Reply |
Here is the issue

"But I think it is the personal preference of a majority of music buyers."

Here is the issue: people who like subscription know that it may not be for everyone. People who don't like subscription think that that they know what is good for everyone (or a majority).

And the fact that Apple does not offer one strength their resolve! Weird.

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Yahoo! to have "modest near-term impact" on Apple

updated 04:45 pm EDT, Thu May 12, 2005

Yahoo impact

should get interesting

huh?

Sigh

Why do they call it...

I don't want to rent

Nonsense...

Agree with olepigeon

re: don't want to rent

what's best for revenue

Woohoo!

rent vs buy

Thoughts ...

to klinux

el

Re: to klinux

Rent vs. Buy

Here is the issue

Login Here

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Yahoo! to have "modest near-term impact" on Apple

updated 04:45 pm EDT, Thu May 12, 2005

Yahoo impact

Related Articles

Recent Articles

should get interesting

huh?

Sigh

Why do they call it...

I don't want to rent

Nonsense...

Agree with olepigeon

re: don't want to rent

what's best for revenue

Woohoo!

rent vs buy

Thoughts ...

to klinux

el

Re: to klinux

Rent vs. Buy

Here is the issue

Login Here

Register for our weekly email newsletter:

Connect tools:

Subscribe

to our RSS

Follow us

on Twitter

10 Most Read

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MacNN Marketplace