New iTunes Brings AOL Content, Screen Names

America Online has a new addition to its repertoire of catchphrases: "You've got iTunes."

Millions of AOL subscribers will now be able to use their screen names to purchase songs from Apple's iTunes music store, without establishing a separate Apple account.

With in excess of 25 million songs sold, Apple maintains an early lead over an increasing number of competitors. Today's announcement bears the fruit of the partnership that the two market leaders struck in October to coincide with the launch of iTunes for Windows.

Earlier today, an updated version of the iTunes software went live on Apple's servers. Build 4.2.0.72 introduces support for AOL screen names, as well as the AOL Wallet and card-on-file. Visitors to AOL Web properties including AOL Radio, Sessions@AOL, Broadband Rocks and AOL Music Search will have one-click access to download featured tracks from iTunes.

AOL Spokesperson Ann Burkart told BetaNews that the company's music properties cater to 16 million visitors each month.

Customers can also choose to set up an "allowance" feature that enables a monthly music stipend to provide minors with their music fix.

To further the partnership, exclusive content performed during AOL's live music sessions is the newest addition to the iTunes Music Store library, which currently stands in excess of 400,000 songs and 5000 audio books.

Evan Harrison, vice president and general manager of AOL Music, said in a statement, "Now for the first time millions of music fans on AOL, who watch their favorite artists perform in an intimate studio setting on Sessions@AOL, have the option to purchase the song digitally via iTunes and then download it right to their iPod."

The updated iTunes also bundles version 6.5 of the QuickTime player. The revamped QuickTime throws in support for additional codecs, unicode text and enhanced digital video playback.

Early next year, Apple is teaming up with Pepsi to seed random 20-ounce and 1-liter bottles of its regular cola, Diet Pepsi and Sierra Mist with winning codes redeemable for a free music download. The promotion is set to give away a total of 100 million tunes.

Rival Microsoft is busy readying its response to Apple's stunning success at legitimizing online music downloads. Redmond's MSN business unit is beta testing a music service, while offering users of Media Center 2004 song downloads via Windows Media based Napster 2.0.

Previously, Microsoft pilot program for music downloads, dubbed Window Media Music Service, ran in Europe.

Other leading vendors and retailers including Dell and Wal-Mart have also thrown their hat into the online music arena. Dell is promoting sales of its Dell DJ portable media player by coupling it with a catalog of songs hosted by MusicMatch.

Wal-Mart has announced a rate of 88 cents USD per song for its proposed store - a move that undercuts iTunes 99-cent price point. However, Jupiter Research senior analyst Joe Wilcox told BetaNews, "Our data shows that 99 cents a song is the right price. I wouldn't expect 11 cents to make that much difference."

"Apple's challenge is too keep its early lead. With 25 million songs sold, Apple is in a position to claim that it has the most popular protected-content music format," said Wilcox. "The AOL deal, and planned February music giveaway with Pepsi, are important for Apple's keeping its lead. The problem: More music stores sell content in Windows Media Audio, which Apple doesn't support."

The updated iTunes may be downloaded for both Mac OS X and Windows via FileForum.

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