Yahoo! Turns on LAUNCH Music Site

Call it the month of online music if you want to, because companies all over the country have been busy rolling out their music
subscription services. If it’s at all possible to saturate the market in a month’s time, it will happen in this increasingly crowded
sector as Yahoo! Inc. Monday launched its new music destination, LAUNCH.

But unlike the likes of Rhapsody, MusicNet or pressplay, the latter two of which are backed
with the mighty weight of the Big 5 recording companies, the Santa Monica-based concern isn’t posing LAUNCH as a subscription
service — just a destination offering music downloads and access to videos and radio.

LAUNCH, which was hatched out of Yahoo!’s June
of LAUNCH Media Inc., is merely a site designed to bolster Yahoo! Music. Like its subscription service
brethren, it will also feature artist interviews, artist features, music news, photos, chart information and album reviews. Run by LAUNCH Media co-founders Dave Goldberg and Bob Roback, it can
be accessed via the “Music” button on Yahoo!’s home page.

Yahoo!, acting in what has been its consistent modus operandi, has positioned the announcement as a key way to help entities promote themselves.
In this case, the firm said labels and artists will benefit from the exposure. LAUNCH has a sales force committed to creating
solutions for its advertising and marketing partners, and will also market music-related services, such as pressplay. Interestingly,
Yahoo! pulled an unusual move by allowing LAUNCH to operate under its own brand, instead of simply digesting it and retaining the
Yahoo! Music name. One can conclude the play hints at Yahoo!’s confidence in the LAUNCH brand.

“As part of our Media & Information business, our new LAUNCH destination strengthens our leadership in the online entertainment
space,” said Greg Coleman, executive vice president for Yahoo!’s North American Operations. “The integration will allow us to build deeper relationships
with our consumers and provide enhanced solutions for our marketing and advertising clients.”

In the broader picture, the move is Yahoo!’s second significant embrace of online music, as the firm also pledged its support for
Vivendi Universal Music’s and Sony Music’s pressplay service, which has for itself an interesting situation. While it’s been beaten
to the punch this month by’s Rhapsody and MusicNet, it recently announced it would let consumers copy, (or “burn” or
“rip” music, as it’s known in the industry) music onto CDs. This, analysts said, is a must in an industry where a key driver will be
offering value-added services that differentiate between rivals to hook consumers.

Indeed, research firms such as Jupiter Media Metrix have been skeptical, saying that although label-sponsored digital music
subscription services will raise the bar in terms of offering the high quality service that consumers want, they will not provide
features necessary to retain long-term customers.

“Label-backed initiatives like MusicNet and PressPlay are doing the right thing by focusing on quality of service as a key
differentiator from the free services out there,” said Danielle Romano, analyst, Jupiter Media Metrix. “However, these ventures must
continue to experiment with new features that consumers want in order to capitalize on the potential market left over from Napster.”

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