Yahoo Working on DRM-Free Music Store

YahooHot on the heels of the Last.Fm announcement that you can stream any song up to three times for free, Yahoo rumors are brewing again. According to two record company executives wishing to remain anonymous, Yahoo is in talks with major record labels about offering DRM-free (unprotected) MP3s either for sale or for free supported by ads. Either way, Yahoo wants to launch the new service this year sometime.

This news could be even more interesting when juxtaposed with what Yahoo Music’s VP of Product Development Ian Rogers hinted at a couple weeks ago. Namely, big news revolving around dramatic changes in Yahoo’s music model. He said, “We’re in the process of redefining what Yahoo! Music is, and making it the Music destination in Yahoo!’s successful image.”

Here is another quote from Rogers (incidentally mentioning Last.fm):

“Today users are creating tremendous value and for the most part we’re ignoring it. They’re writing blogs about your artists, putting bios on Wikipedia, documenting last night’s concert on Flickr and video sharing sites, showing what songs are most popular by their behavior on Last.fm, building “box sets” on community sites, etc. How has the music industry leveraged this? What tools have you created to enable or encourage it?”

I’ve already discussed how I now use Amazon MP3 over iTunes (DRM-free, cheaper, no switching costs, etc.), but Yahoo could become the online music retailer of choice if it were to create a more holistic platform which would include music buying, playing, managing, and sharing.