updated 10:55 am EST, Fri January 12, 2007
AOL Gives Up Music Store
AOL on Friday morning revealed that it was abandoning its Music Now online music store. The deal will send the company's existing 350,000 subscribers to Napster, which will keep the pricing and other aspects of the AOL users' service intact until the changeover is complete in the next two months. While no exact reason for the change has been given, AOL in late summer of last year said it was exiting the paid content business, switching to a free ad-sponsored model after bleeding large numbers of subscribers to its core Internet access. AOL had only started Music Now in mid-2006.
The adoption of AOL customers may have a dramatic impact in Napster's influence in online music downloads. The copmany recently enjoyed unusual success among non-iTunes stores, jumping by nearly 50,000 subscribers at the end of 2006 to reach a total of 566,000. The AOL deal will see Napster's total user base jump by over 60 percent.