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Yahoo hints at Australian iTunes rival

Yahoo is readying a subscription-based music download service to compete against iTunes in Australia, but it is unlikely to launch until 2007.

Yahoo Music Engine
Yahoo is readying a subscription-based music download service to compete against iTunes in Australia, but it is unlikely to launch until 2007.

At a demonstration of Yahoo's free Internet radio service in Sydney, product manager for Yahoo's Australia & New Zealand music division Louise Pay told CNET.com.au that the company is currently testing its music download service for release locally, but that it wouldn't be available until next year at the earliest.

Yahoo Music launched in Australia in August, 2004 and now streams 1.3 million tracks and 800,000 videos per month free-of-charge to approximately 700,000 local users, according to the company.

However, the service at the moment is a trimmed down version of what Yahoo currently offers in North America. In the United States and Canada, the Web giant is competing with the incumbent number one digital music provider Apple by providing an alternative, subscription-based music download service, called Y! Unlimited.

For approximately US$5 a month, Y! Unlimited subscribers can download an unlimited number of songs from its 1 million song catalogue using Yahoo Music Engine software, albeit with Windows Media digital rights management (DRM) tacked on for copyright protection. A valid subscription entitles users access to saved songs, but, in contrast to Apple's business model, when you stop paying, you lose the right to play your downloaded collection.

Will next year be too late?
Although Apple has only been in the music download market locally for four months, iTunes has quickly become the number one online music download service in Australia. Yesterday, the California-based company celebrated the downloading of its one billionth song globally by giving the user that clocked up the 10-figure milestone a 20-inch iMac, 10 video-capable iPods and a US$10,000 voucher for downloading songs from iTunes. At its current growth rate, the company will hit 2 billion songs by the end of the year, according to estimates.

Click here for more information on download music services available in Australia.