Yahoo finally threw down the gauntlet and announced they were launching their own music service. Unlike iTunes, where you buy a song, the Yahoo Music Unlimited service, will sell subscriptions to a one million strong library where you can download unlimited songs for $60 a year.

The library comes from the combined Launch and MusicMatch libraries – which are obviously substantial.

Here’s what the press release says:

Under the rental model, consumers must pay a recurring fee and synchronize their portable music players with the subscription service at least once a month to preserve the music. If the subscription expires, the previously downloaded music becomes unplayable.

Renters also can’t transfer downloaded songs to a compact disc without paying an additional fee. Yahoo will charge its subscribers 79 cents to own a song, below the 99 cents-per-song price of Apple’s music store.

Renting will make for an interesting business model – especially, since this will be the model for content in the future. (Oh, you thought all those free downloads would last forever?)

If you are interested in an artist, you’ll download a song. If you don’t like the song, after a month, it’ll disappear thanks to the magic of digital rights management (DRM). If you do like the song, then you’ll theoretically buy it from Yahoo or go out and buy the CD. Of course, you also could go out and download it illegally using a file-sharing service.

The biggest issue: The service is not compatible with Apple’s iPod. Whether that will handicap the service remains to be seen.

In terms of branding, the service’s name – Yahoo Music Unlimited – is purely and unequivocally descriptive. Since Yahoo is such an evocative name, however, it’s very difficult to pair it with something that is as evocative.

(Yahoo! did do that with the MessagingLab-named 360° blogging/social networking service.)

Perhaps, Yahoo Unlimited Music would’ve been better as the abbrev. would’ve been YUM!

Here’s the link.