YOU'VE GOT MUSIC!

Since his arrival at AOL Music from BMG last year, Kevin Conroy has faced multiple challenges. These include expanding and deepening its music offerings in a way that engages its huge and diverse user base; introducing an array of new features while cleaving to AOL's cardinal rule of easy use; and, last but not least, realizing his goal of a "holistic" approach as the rest of the digital space fixates on particular technologies and behaviors. Still, in a relatively short time, Conroy has managed not only to substantially raise the profile of the online leader's Music division, but also to drive new memberships and establish a dizzying number of alliances and promotional partnerships. AOL Music plays a key role in AOLTW's vertically integrated strategic deals (such as the recent pacts with Burger King and Toyota), and has assembled promotions for Britney Spears, NSYNC, Jewel, Mary J. Blige, Creed and numerous other established and developing acts. Meanwhile, AOL 7.0 offers streaming radio (which drew more than 2 million users within two weeks of its debut) and there are new versions of the acclaimed Spinner and Winamp applications available for AOL's Web users. But Conroy must have wanted to pull the plug after having to explain it all to HITS' e-geek Simon "& Garfunkel" Glickman, who inexplicably salivates every time he hears, "You've got mail." (For the full interview click here or on the "Doubletalk" button above.)

AOL Music has ramped up its offerings quite a bit recently.
The goal has been to create a different kind of environment for online music—to transform the experience. When many people think about online music, they think about ordering a CD, downloading a song or sharing an audio file. Online music is so much more than any of those things. This interactive medium provides us with the ability to create an environment online that should be thought of in much more holistic terms. The business of music is actually made up of different things: recorded music; live music; publishing; music video; the money brand-marketers spend on advertising in a radio environment; TV specials. The centerpiece is, of course, the music itself, but the business is much broader than that. Thinking about that offline is important because it informs what we want to achieve online—namely, to create a compelling environment. It's the environment that leads to interest, and it's the interest that makes people want to take action. And the action takes many forms. If you create the right interactive environment that people find compelling, they will want to spend more time there. That time spent will lead them to participate in a promotion, download a song, listen to radio, buy a CD or a ticket—often in advance of the general public, as we've done with Madonna, Sugar Ray, Britney and others.

Tell us about some of the programming and its effect on record sales.
We've done different kinds of promotions with every major label and most independents. These include Artist of the Month promotions and the Artist Discovery Network, which we launched in July—things that have had a measurable impact on breaking new artists, such as Michelle Branch on Maverick, and the success we've had promoting Jewel. The impact we had on online pre-order sales for Jewel's new album is significant.

How are you driving users to the music channel and how are you using music to promote the service itself?
Our music programming and promotions are featured throughout the AOL service and on the AOL Welcome Screen. The popularity of what we're doing with music has caused more and more people to ask for visibility on the music channel, since they know that's serving as a welcome screen. It's something people compete for; they're increasingly raising the stakes in terms of what they're offering to us, in terms of promotions and assets, for features on the music channel screen. In terms of using music to promote the service, Radio@AOL is being featured in the TV ads for 7.0, and Lindsay Pagano's music—for which we put a whole promotion together—is also featured in AOL advertising. The marketing of the service is taking advantage of the importance of music. Because of the size of our audience and the importance of music for our audience, we are an increasingly important marketing partner for labels. Our label relations team has put a great deal of effort into building strong partnerships and, as our audience has grown, the labels have come to appreciate the power of AOL Music to reach its audience and promote both new and established artists. We're becoming a very important media property.

It seems you've emphasized all along that most users aren't all that interested in the technology compared to the entertainment content.
The way to help this medium continue to establish itself, and the way to really create a business for online music that's as robust as the one for offline music, is to appeal to a broad market. You have to create an environment which provides different offers for different people, with products that bring that experience to life and make it easy.

Tell us about your plans for the MusicNet service.
AOL Presents MusicNet 1.0, which is currently in beta and expected to be broadly available this month, will be the first of what we anticipate to be a number of premium services that AOL Music will make available to members. There will be an additional subscription charge. There's a tremendous amount of value currently available to AOL members and we feel great about it, especially with the new 7.0 features. For those who are the most interested in owning music and having a dedicated digital music subscription service, MusicNet will be an additional offer, providing access to 100 downloads and 100 streams for $9.95 per month.