AOL buys MusicNow; iTunes partnership to continue

AOL confirmed today that it has bought Circuit City’s MusicNow digital music service. Financial terms were not disclosed, but insiders said AOL paid less than $25 million. MusicNow will offer 99-cent song downloads and monthly subscriptions for $9.95 for unlimited downloading. Like services from Napster and Yahoo, users can download songs to a compatible music player for an additional fee.

AOL entered into a partnership with Apple in 2003 to promote the iTunes Music Store through its internet service. AOL members can also sign in to the iTunes Music Store using their AOL screen name and password to buy tracks. The company said its purchase of MusicNow will not immediately affect its relationship with Apple. “AOL’s partnership with iTunes is strong, has been fruitful for both companies, and will continue,” said AOL spokesman Nicholas Graham.

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