America Online acquires MusicNow LLC

America Online acquires MusicNow LLC

America Online has announced their plans to take over the Circuit City Stores Inc.’s digital music subscription service MusicNow LLC. This move would help the Times Warner unit compete against the likes of RealNetworks, Yahoo, Napster, and other subscription services. Apple is the market leader when it comes to online music sales but does not currently offer any subscription services.

Rumors in the market claims that AOL paid less than USD 25 million for this deal. However, the companies have not released any figures from their side. After this acquisition, MusicNow would be selling individual tracks for 99 cents, a price which matches the offer from Apple iTunes. In addition, it would be offering a subscription service for USD 9.99 a month for unlimited downloads or streaming music from their servers.

In addition, they would also allow the users to transfer the songs for download to their portable music players in the subscription scheme for an extra USD 5 a month. This price matches the competition’s offering in the same market. Interestingly, AOL has a special partnership with Apple Computers, which would be their prime competitor in the online music sales market. However, their dealing with Apple is related to AOL’s ISP division.

AOL is also hoping to increase the traffic to their sites with these value added offerings. The ultimate aim is to increase their earnings through online advertisement modules, which has become something of a craze in the recent times for online publishers.

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