Yahoo! Music Unlimited Turns Out To Be Limited

A few months ago, we covered the decision by Microsoft to turn off its digital rights management (DRM) servers for its now-defunct MSN Music service. The DRM servers are required to play purchased music on up to five authorized computers, so turning off the DRM servers means that a machine with an updated operating system will no longer play content, and no alternate machines can be used to play the purchased music if the consumer wants to replace an authorized machine.

Microsoft eventually backed down, after the hue and cry of consumers and news reports, lengthening the time it would maintain its DRM servers for an additional three years and promising to assess consumer needs at that particular point.

"After careful consideration, Microsoft has decided to continue to support the authorization of new computers and devices and delivery of new license keys for MSN Music customers through at least the end of 2011," the email said, "after which we will evaluate how much this functionality is still being used and what steps should be taken next to support our customers."

Last week, Yahoo! made the announcement that it intends to shut off its Yahoo! Music Unlimited DRM servers in fairly short order.

"The Yahoo! Music Store, along with the ability to purchase and download single songs and albums, will no longer be available as of September 30, 2008," an email from the company announced. "Songs and albums that were purchased through the Yahoo! Music Unlimited Store are protected by a digital rights management system that requires a valid license key before they can be played on your computer.

"After the Store closes, Yahoo! will no longer be able to support the retrieval of license keys for music purchased from Yahoo! Music Unlimited," the email announcement continued, "and Yahoo! will no longer be able to authorize song playback on additional computers. Please note that your purchased tracks will generally continue to play on your existing authorized computers unless there is a change to the computer's operating system."

Like Microsoft, Yahoo is recommending that users "back up" their purchased tracks to an audio CD, circumventing the DRM in the process.

"For any user who purchased tracks through Yahoo! Music Unlimited, we highly recommend that you back up the purchased tracks to an audio CD before the closing of the Store on September 30, 2008. Backing up your music to an audio CD will allow you to copy the music back to your computer again if the license keys for your original music files cannot be retrieved."

"The reality is that users of this service can burn these tracks to CD with little if any degradation in the quality of the music," said Christopher Levy, a Streaming Media All-Star and president of BuyDRM, offerig a bit of perspective on the Yahoo! announcement.

"Much like MSN, Yahoo got out of the music business quite some time ago due to their lack of traction in the space," said Levy. "As a business decision this makes sense."

Levy feels the news coverage about this topic is primarily a way for writers to use "as another touch point to get banner impressions." Interestingly, though, Yahoo! isn't getting out of the music business entirely, as it used the email announcing the death of its DRM servers as a way to remind customers that its partnership with Real on the Rhapsody music service will allow it to continue selling content.

"While the Yahoo! Music Unlimited Store will no longer be available," the email announced, "Yahoo! Music has partnered with Rhapsody so you can still purchase your favorite tracks . . . Thank you for using Yahoo! Music."

Rhapsody, as mentioned in a June 2008 story, also now sells DRM-free music tracks, although it is uncertain whether Yahoo! Music will be selling these DRM-free MP3 tracks.

"For the music business, the battle continues to be 'How can we beat Apple without DRM while they beat us with DRM’?" said Levy. "Nobody seems to have solved that riddle yet and this lack of a solutions continues to benefit Apple as the world’s leading music retailer and the largest provider of DRM-enabled music in the world."

Levy acknowledges that Apple sells DRM-free content through its iTunes Music Store, but sums up the argument for DRM as Apple's Achille's heel.

"If Apple licensed FairPlay we wouldn’t be having this discussion," said Levy. "But this situation does bring to light an important issue. What happens when Apple decides their margins on selling music are too thin [rumored to be + / - $.02 per track sold] and they decide to shut down their FairPlay servers? Where will this discussion take us then?"