AOL said on Thursday it bought Circuit City Stores Inc."s digital music subscription service MusicNow LLC, a move that thrusts Time Warner Inc."s Internet unit into competition with RealNetworks, Yahoo, Napster and other subscription services.
Financial terms of the deal were not disclosed, but a source familiar with the matter said AOL paid less than $25 million. MusicNow will offer downloads at 99 cents each, comparable to iTunes, and it will offer monthly subscriptions for $9.95 for unlimited downloads or streaming, which refers to listening to music online without downloading it.For an additional $5 a month, listeners can download songs to a compatible digital music player.
RealNetworks Inc"s Rhapsody subscription service is $9.99 a month. Napster sells its service for $9.99 a month. Yahoo"s service is $6.99 a month, or $4.99 a month if one buys a 12-month subscription. Last month, CNET reported that Yahoo was raising its price to $11.99 a month for users who want to download music to digital music players.
AOL currently has a partnership with Apple Computer Inc."s iTunes, by far the largest online music service. But that partnership is aimed at members of AOL"s Internet service.