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"We'll use our assets to provide leadership that selling music online is not a bad thing, but an opportunity. Our strategy is to show the way."
—Barry Schuler, AOL president interactive services

HAS AOL THROWN ITS DIGITAL HAT IN THE RING?

New Version Of Popular Browser May Serve As Portal For Subscription Download Service
The release of AOL 6.0 may be America Online's first salvo in the digital download war.

Embedded in version 6.0 is the new all-in-one AOL Media Player, which Inside.com reports is expected to be at the forefront of AOL's post-Time Warner-merger strategy: a cheap and easy music subscription service to rival file-sharing outlaw Napster.

So far, AOL execs are hush-hush about any specific plan, but AOL President of Interactive Services Barry Schuler said that the combination of new software and Warner Music content would allow the company to set an example for other labels to follow. "We'll use our assets to provide leadership that selling music online is not a bad thing, but an opportunity," Schuler said. "Our strategy is to show the way."

AOL's 25 million customers already accustomed to having their credit cards billed each month, may make AOL seem like the natural choice, according to Inside. But the company's ties with Time Warner—and presumed favoritism thereof—could hamper that strategy, just as it may be unlikely that all five of the major labels would jump on Universal's play, Jimmy and Doug's Farmclub.com, which launched its subscription model beta test just last week (hitsdailydouble, 10/23).

While some reports have Sony joining with Farmclub.com, there is the Internet connectivity of the company's new Playstation 2 console to consider. And, as one major label exec put it, "Why would any other record label join the Universal service and build up the Farmclub brand? It doesn't make any sense."

Also, any joint approach would inevitably prick up the ears of federal regulators, who aren't too keen on the big five getting together on anything. (MAP anyone?)

While it may seem to make sense, from a business standpoint anyway, for each label to control its own content, consumers don't generally shop for music by brand so much as by band. But a third party provider—like MP3.com, Musicbank, Amazon or (sure, we'll say it) Napster—is also not so sexy to the record labels, as it takes control out of the labels' hands, much in the same way that the rise to power of radio and MTV did. Which might mean five subscription models for consumers to deal with.

As Inside reports, any balkanized subscription plan would only frustrate people. While Universal's Farmclub trial is pretty groovy, it still only represents about 30% of the American music market. And as MP3.com Chairman (and apparent math whiz) Michael Robertson told Inside, "If you only have 20% of the content, you're going to disappoint people 80% of the time."

The same goes, we suppose, for roughly 30%.

While the picture is still unclear as to exactly what kind of subscription service might be available to consumers in the near future, one thing is certain from the latest goings on: the pay-per-download model is quickly gathering dust.

And in the meantime, there's always Gnutella.

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(Adele.)
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