Yahoo To Shut Premium Music Service, Redirect Users To Rhapsody…For Now

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Yahoo will shut its premium music service tomorrow, a move away from premium music sales we first reported on in September 2007, and instead redirect users to Real Networks’ Rhapsody service. Terms of the deal are not yet available.

According to an AP report, subscribers to Yahoo Music Unlimited will be shifted to the Rhapsody service in the first half of this year with Yahoo subscribers’ music library and payment plans remaining the same for only a limited time after the switch. Yahoo Music Unlimited plans came in at between $5.99/ month and $8.99 /month, compared to Rhapsody’s $12.99/ month charge.

The move alone is part of the further consolidation in the online music marketplace as more companies abandon standalone efforts in favor of partnerships as Apple’s iTunes continues to dominate the online music marketplace. The move itself may be short term with Yahoo users likely to be forwarded to the Zune marketplace if Microsoft’s acquisition of Yahoo is successful.

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