Predicting that subscription-style services will have a long battle ahead as they try and win market from Apple, Jupiter Research analyst David Card said: "There's only one device that matters, and you can't use it with Yahoo's music service."
There are a number of obstacles that Yahoo, Napster and other subscription services need to overcome before they can win over the music-loving public, suggests Business Week.
Subscriptions won't become mainstream overnight because changing consumer behaviour "will take some doing", reporter Peter Burrows writes.
He also writes: "Subscription rates may remain higher than most people are willing to pay", suggesting that it may not be possible to "make money selling subscriptions at Yahoo's attractive price." According to the report: "Several industry sources say the business model probably isn't sustainable." Many believe it will be forced to raise rates, writes Burrows.
Universal Music Group's executive vice-president Amanda Marks: "[They] need volume, [and] when [they] get it, the price will come up,"
Another digital-music exec said: "The music industry wants to get people hooked on subscriptions and then increase prices, just like the cable-TV guys do."
On-the-other-hand, many music execs believe Yahoo is charging too little and could get consumers hooked on unsustainably low prices, notes Burrows.
"The labels are very sensitive to the devaluation of music," says Richard Wolpert, RealNetworks' chief strategy officer.
"Yahoo hasn't ruled out future price hikes," writes Burrows.