Yahoo Sings a Duet

Yahoo is hearing the call of online music. The Internet portal will partner with Duet, the online digital music subscription service created by Universal Music Group, a unit of Vivendi Universal, and Sony Music Entertainment, the companies announced on Thursday.

Duet, which is expected to launch during the third quarter, will be presented and marketed to Yahoo's U.S. users, the companies said in a joint statement. Worldwide roll-out is expected before the end of the year.

Enthusiasm for the deal was obvious during a conference call. Jeff Mallett, the president and chief operating officer of Yahoo, said his company is "really jazzed" about the deal. Howard Stringer, chairman and chief executive of Sony Corporation of America, said the deal heralds the "start of a brave new world" for digital entertainment.

Duet was conceived as a streaming music service that will charge a subscription fee for on-demand access to music, but, shortly after it launches, it will add the ability to download digital music, the companies say.

Tough Competition

The music will come from Sony Music and Universal Music on a nonexclusive basis, and Duet will seek agreements with other content providers. Though Duet is open to other negotiations, the company is not currently discussing any deals, Sony's Stringer says.

Some concrete details of the service were absent from the conference call, especially pricing and consumer issues, and whether the music will be usable in portable music devices or shareable.

Vivendi Chairman and Chief Executive Officer Jean-Marie Messier did indicate that the service will offer multiple subscription tiers with more options attached to higher-priced tiers. Prices will not be made available until much closer to the service's launch, he said.

Duet will be in direct competition with MusicNet, a new online music subscription service announced Monday by EMI Group, Bertelsmann AG, and AOL Time Warner, along with RealNetworks.

Messier said the group is open to working with the other major labels for a combined service. Any record company, major or independent, "is more than welcome to join Duet," he said. Acknowledging that users will likely be more attracted to services that offer more music (though Duet's catalog does represent 47 percent of the music market, he said), Duet hopes to find a way to include more songs, Messier said.