AOL Beefs up its Music Network

As the fall launch of its digital music subscription service approaches,
America Online is adding more features and content to its popular AOL Music
Channel, ensuring that its 30 million ISP subscribers stay within the AOL
network for their music fix.

The two new services, Artist Discovery Network and [email protected], are to be
as part of the AOL Music Channel; as part of its Internet-based radio service which offers about 150
different channels of music, and WinAmp, the multi-media player with an
estimated 90 million users and counting.

AOL said The Artist Discovery Network would feature information about
emerging music artists, original programming, including editorial
perspectives from content partners Digital Club network, CNN World and
National Public Radio. Some of the labels represented include Arista, Ark
21, Atlantic, and, of course, Warner Brothers, the struggling music division
of parent company AOL Time Warner, Inc.

The other new feature, [email protected], will be hard to miss when the next ISP
client, AOL 7.0, is rolled out to AOL subscribers.

[email protected] is planning to feature more than 50 channels of programming,
including shows for kids, a weekly interactive countdown show and other
Internet radio programming in the traditional radio mold.

The company unveiled the additions as Kevin Conroy, senior vice president
and head of AOL Music, gives one of the keynote addresses at the two day
Jupiter digital music conference in New York Monday and Tuesday.

“The programming, products and services we’re introducing will expand
opportunities for consumers to experience music in a variety of ways,”
Conroy said of the new offerings. “AOL’s wide range of music assets and
expertise positions us to drive the growth of digital music and make the
Internet even more central to members’ lives.”

AOL’s parent company, AOL Time Warner, is working with Bertelsmann AG and
EMI Group plc to unveil MusicNet, which will offer streaming music and
downloadable media across Real Networks’ and AOL’s networks.

As the major music labels ready their pitch to get customers to subscribe to
digital music services, AOL is leveraging its major position as the nation’s
largest ISP as well as the parent company’s position as the world’s largest
media and entertainment company in order to ensure it grabs a major chunk of
the action.

According to Media Metrix, AOL Music counted 23 million unique users in
June. With integration one of the the watchwords at AOL and its various networks, the media company has a major base of users to convert to its digital MusicNet service when it launches.

Added Conroy: “With broadband poised to become more widely available, we’re
also taking the lead in building a bridge for consumers between today’s
products and services and the online music future.”

But even as more consumers get wired for high speed and broadband Internet connections, research outfits say the music labels are going to have to add lots of interactive extras to entice subscribers to plunk down between $10 and $20 a month for digital music downloads.

Fifty-nine percent of music buyers, defined as those who bought music online in the previous 12 months, said they were interested in signing on to an online music subscription, according to a survey by Jupiter Media Metrix.

The survey said that although the coming subscription services from the major music labels would score high for quality of service, they fare poorly in their ability to provide the features most important to consumers: making copies of downloaded songs and listening to the songs on any device.

Neither of the coming services, MusicNet and pressplay, the subscription service backed by Microsoft Corp. along with Sony Music and Universal, are expected to allow these two features when the services launch.

So if they want to capture the lucrative market, especially as Napster struggles with legal headaches and its user base ebbs away to other music download services, the labels need this kind of content and interactive features to make subscriptions worth the price, Jupiter said.

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