AOL buys MusicNow

AOL today announced that it has -- Circuit City's digital music subscription service -- placing Time Warner's music division in direct competition with Apple's iTunes Music Store. A source familiar with the matter said AOL paid less than $25 million, while the strategy allows AOL to build its online advertising revenue at AOL.com, as well as derive subscription revenue from the music service, according to a report from Reuters. MusicNow will reportedly offer downloads for $1, the same sum that consumers currently pay for tracks at the iTunes Music Store, and will offer monthly subscriptions for $10 allowing unlimited downloads or streaming, according to the report. For an extra $5 per month, customers can download songs to a compatible digital music player; however Apple's iPod is not supported.

by MacNN Staff