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$4.99 Music? Yahoo!

Yahoo is getting into the music business. They are offering access to over a million songs for a subscription fee, not unlike Napster or Rhapsody. They seem to have the competitive pricing to succeed.

Their low prices will probably bite into iTune’s sales. How will Apple respond? And will others be joining the fray? I can imagine Google launching a music service with searchable lyrics or discographies. Or maybe someone else will launch a music site with unforeseen innovation.

Digital music continues to grow and companies are enjoying rising profits. And as sales climb, will record companies take notice? Will they finally bring down CD costs to a competitive price point? Or maybe ditch physical CD sales altogether and open their own mp3 stores? The last few years has shown digital music is not a fad, but the future.

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