AOL continues overhaul with MusicNow launch

Posted Aug 29th 2006 1:14PM by Howard Tsung
Filed under: Launches, Consumer Experience, Internet, Blogs, Competitive Strategy, Google (GOOG), Yahoo! (YHOO), Time Warner (TWX)

In AOL's continued makeover from bloated-has-been to its new target of lean-mean and on the cutting edge, AOL today has announced the launch of a music download service to complement its recently purchased MusicNow service.

The download service will offer some 2.5 million audio tracks for download at the iTunes established market price of $0.99 per song and music videos for $1.99. This comes on the heels of yesterday's launch of AOL's video service covered here by Brian White.

Additionally AOL Music Now will offer two subscription services. For $9.95 the user will have unlimited streaming and downloading to the user's computer. At $14.95, the user will have the features of the $9.95 service as well as the ability to copy the files to a PlayForSure device.

AOL's music history in quick recap: first, the company started with MusicNet in 2003 (strictly for AOL users), which followed with 2005 purchase of online site MusicNow. Since November AOL has launched a preview version of the new AOL MusicNow service (available to all users).

While the service is constantly undergoing refinements, the latest reviews (April/May 2006) from CNet and PCMag score the service in the Good to Very Good range, respectively.

The AOL MusicNow service is a standalone portal meant to compete in the awkward space between iTunes, Yahoo! Music, Rhapsody, Napster, Virgin and the plethora of music download sites, internet radio sites.

Awkward in that aside from iTunes none of the other sites are enviable business models generating huge revenues or growth.

However this move is good for AOL as they continue the transition from ISP to a full fledged Web and Online Media Portal, essentially moving from a subscriber based revenue model to a advertising revenue business (in the fashion of Yahoo! and Google).

While AOL's newest move doesn't revolutionize the industry, it is another needed step in AOL's course of catching up (vis-a-vis: mimicking major components of competitors).

AOL has done a good job of doing what it does best, taking the latest innovations and bringing them to its core customers; mainstream users who prefer technologies mature rather than early-adopters who don't mind betas and bugs (not to say AOL has a history of being bug free!).

Tags: aol, download, itunes, music, musicnow, raphosdy, yahoo