Yahoo is planning to raise the prices of its recently introduced subscription music service.
Yahoo Music Unlimited offers unlimited access to a library of more than one million songs for a flat monthly fee.
Yahoo initially charged $6.99 a month or $59.88 a year for its service. The offering entitled users to download music to computers and portable media playing devices.
The company sent an email to current subscribers last week informing them that prices will be raised to $11.99 a month and $119.88 a year from 1 November.
Rhapsody, a subsidiary of Real Networks, and Napster charge about $15 per month for their comparable unlimited subscription music plans.
Consumers willing to listen to music only on their computers pay the current rates of $6.99 per month or $59.88 per year. Napster and Rhapsody charge $9.99 per month for similar plans, with Rhapsody offering a $99.96 yearly subscription plan.
Yahoo's price increase takes away some pressure from its competitors, although the internet portal remains about 20 per cent cheaper.
Harry Wang, a research analyst at Parks Associates, suggested that Yahoo is subsidising its music service.
While pure-play music providers will have a hard time competing, they can counter Yahoo's move by teaming up with broadband providers, offering music subscriptions bundled with their service.
In a study published last August, Parks Associates concluded that $10 was the sweet spot for the music subscription market.
The study found that 62 per cent of UK consumers would cap their interest in such plans at that price. In the US only 42 per cent of consumers are willing to spend more than $10 per month.
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