This is the most interesting part of the article. <<Downloading high-quality music from the Internet for playback on personal computers is still in the early adopter phase, but it is rapidly catching on with more consumers. According to Internet measurement firm Media Metrix Inc., there were four million users of digital music in U.S. households in June, a sharp jump from a few hundred thousand less than a year ago.>>
AOL Strikes Deal With EMusic.com
For Online Delivery of Digital Music
By NICK WINGFIELD
Staff Reporter of THE WALL STREET JOURNAL
America Online Inc. Monday is expected to announce that digital music company EMusic.com Inc. will supply AOL users with music for purchase and download over the Internet.
The three-year deal with EMusic, Redwood City, Calif., is AOL's latest foray into the fast-growing world of digital music. The agreement calls for EMusic to promote songs from its catalog of musicians to users of AOL's Spinner.com and Winamp music players, as well as the online provider's ICQ chat service. The partnership is nonexclusive, allowing AOL to cut similar deals with other music sellers.
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Issue Briefing: I Want My MP3
Company Profile: America Online
Financial terms of the agreement were not disclosed. EMusic will pay AOL a fixed marketing fee for the three years of the deal, plus a percentage of transactions. EMusic also has agreed to sell warrants to AOL that will entitle the online provider to acquire a stake that amounts to "considerably less than 10%" of EMusic's outstanding shares, said Gene Hoffman Jr., president and chief executive of EMusic.
Downloading high-quality music from the Internet for playback on personal computers is still in the early adopter phase, but it is rapidly catching on with more consumers. According to Internet measurement firm Media Metrix Inc., there were four million users of digital music in U.S. households in June, a sharp jump from a few hundred thousand less than a year ago.
EMusic sells songs in MP3, a digital format that has proved to be a huge hit with Internet users. The format, which has drawn criticism from the recording industry, lacks copyright protection features, and many of the MP3 files exchanged online are illegally pirated. EMusic, though, has about 20,000 MP3 songs for sale that are licensed from independent record labels. Most of those songs sell for 99 cents apiece; albums sell for $8.99.
The EMusic pact marks AOL's latest move in the digital-music arena. In June, the company acquired Spinner and Nullsoft Inc., the maker of Winamp, for a total of $400 million in stock. Winamp remains one of the most popular programs for playing MP3 songs, with an estimated 1.8 million users in June, according to Media Metrix.
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