AOL buys MusicNow digital music service from Circuit City
America Online Inc. has acquired the MusicNow digital music service from Circuit City Stores Inc., AOL said today. AOL MusicNow will offer 99-cent single downloads and a monthly subscription service.
The deal puts AOL in direct competition with Apple Computer Inc.’s iTunes Music Store, which sells single digital music downloads at 99 cents each, and subscription services like Napster. AOL will charge a subscription price of $14.95 per month for unlimited streaming and downloading to a computer and to any “PlayForSure” compatible music device.
"The MusicNow transaction allows us to superserve our AOL members and expanding web audience with a truly best-in-class, full-service, digital music platform," said Ed Fish, senior vice president and general manager, AOL Premium & Subscription Services.
MusicNow, which offers a digital catalog of more than one million songs, was founded in 1999 as FullAudio Corp. Circuit City acquired it last year.
"We decided that MusicNow would grow and thrive better as part of a company that owns the content,” a Circuit City spokesman says. He adds that Circuit City still expects digital music to be a strong market, and it will continue to offer MusicNow digital music through its web site and sell MusicNow cards online and in stores. “Our customers won’t notice the difference,” he says.
MusicNow will continue to be based in Chicago; it will operate as a stand-alone, wholly owned subsidiary of AOL Premium Services LLC, a subsidiary of AOL in the Digital Services business unit, AOL said. MusicNow`s 40 employees, including president Gary Cohen, will report to Fish and Amit Shafrir, president, AOL Premium Services.
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