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News
AOL Drops MusicNow Service
Sunday, January 14th, 2007 at 2:00 PM - by Jeff Gamet
AOL is giving up on its MusicNow service, and is now teaming with Napster for online song downloads. The service was launched in November 2005 as an updated version of AOL's MusicNet subscription service, according to Online Media Daily.
AOL was hoping its subscription-based music service would raise company revenues and also offer a viable alternative to Apple's iTunes Store.The service did not, however, live up to expectations.
Forrester Research analyst Josh Bernoff commented "You can definitely say that if AOL's music strategy were working they wouldn't have had to go outside the company."
AOL's 350,000 subscribers are being transitioned to Napster's subscription service.
The news comes only days after Virgin Group shut down the Virgin Digital music subscription service and announced a partnership with Napster. Both the AOL and Virgin deals are good news for Napster. The company has been working to improve its standing it the music download market, and also to sweeten the pot for a potential buy out by another company.
The competition among subscription-based music services is steep, especially when they have to go up against the pay-per-download model offered by the iTunes Store. Mr. Bernoff added "Being a music service these days is pretty hard unless your first name happens to be Apple."
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