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Apple Announces Major iTMS Partnership With AOL

Apple Announces Major iTMS Partnership With AOL

by , 3:45 PM EDT, October 16th, 2003

Apple announced a surprise alliance with AOL today that will bring iTunes directly to AOL's 25 million subscribers. Introduced at Apple's PR event in San Francisco earlier today, Steve Jobs demonstrated to the crowd how AOL users will find an "iTunes" button next to songs offered in AOL's music section. When users, Mac or Windows, click on the button, it will launch iTunes and take the person directly to the iTunes Music Store (iTMS) page for that song. AOL's customers will pay the same price as other iTMS users, and enjoy the same usage rights.

John Miller, CEO of AOL, joined Steve Jobs on stage at the event, praising Mr. Jobs and Apple for their work in bringing the iTMS to market. From Apple:

Apple and America Online, Inc., the world's leading interactive services company, today announced an alliance to provide instant, one-click registration to the iTunes Music Store for AOL's more than 25 million U.S. members starting later this quarter. America Online will integrate links to iTunes artists, albums and songs throughout its leading music site, AOL Music, which will give members the option to link directly to the specific iTunes Music Store page to preview and buy music as they browse and read music news and reviews.

"Apple and AOL are making it easy for AOL's 25 million U.S. members to legally buy music online," said Steve Jobs, Apple's CEO. "With just one click, AOL members will be able to legally preview, purchase and download music from the iTunes Music Store's catalog of more than 400,000 songs."

"Apple's iTunes Music Store is a runaway hit," said Jonathan Miller, chairman and CEO of America Online. "Today, Apple and AOL are uniting the number one music destination site, AOL Music, with the number one music download site, Apple's iTunes Music Store, to bring customers the most complete online digital music experience."

Apple's iTunes Music Store revolutionized the online music industry with its groundbreaking personal use rights and one-click download directly into iTunes, Apple's integrated digital jukebox software—all for just 99 cents per song. Since its launch six months ago, music fans have purchased and downloaded more than 13 million songs from the iTunes Music Store, making it the number one download music service. Apple today launched its second generation iTunes Music Store for both Mac and Windows users. With music from all five major music companies and over 200 independent music labels, the iTunes Music Store catalog is growing every day and will offer more than 400,000 songs by the end of October.

AOL Music reaches the largest audience of online music fans in the world, with more than 16 million monthly unique users, through a rich array of programming, products and services that make it easy to discover, experience, listen to and buy music online. Among the groundbreaking programs on AOL Music are advance previews of songs and videos before they are available anywhere else, live concerts and much more. AOL Music's offerings are available at the number one Internet music destination, the AOL Music Channel, and throughout the AOL and AOL for Broadband services and America Online's family of Web brands including Netscape, CompuServe, AIM, ICQ, Spinner, Winamp and SHOUTcast. Apple will offer selections of AOL's popular, original content such as Sessions@AOL and BroadBAND Rocks! through the iTunes Music Store.

You can find more information about AOL at its Web site.

The Mac Observer Spin:

We have long advocated that Apple work with such companies as Amazon.com and AOL, and the company has done just that. This is a remarkable business deal that Apple has put together, one that could reap enormous benefits for the company.

Of course, AOL also wins, both in its AOL unit, as well as its Warner Bros. holdings and associated music labels. AOL had earlier made signs that it would be working with Microsoft on selling songs, but the company has chosen instead to work with a superior technology. That's great for AOL's users who won't be saddled with having their songs in the Window Media format. Of course, it's also a great way for AOL to promote the legitimate online sale of songs, and that will very much help its music businesses.

We also very much appreciate the symbolic aspects of this business deal. Apple has always been keen on controlling the "whole widget," as Steve Jobs puts it, or every aspect of its products. That's great for the Mac platform, but doesn't translate well to music disrtibution in our opinion.

While iTunes is still firmly in control of the sale, delivery, and playing of songs sold through AOL, this deal shows that Apple is willing to work with other companies when it comes to reaching customers in the music market. That's an important, if subtle shift in Apple's modus operandi.

Next stop, Amazon. Or so we hope.

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