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Online music to rocket; AOL wants to be at controls

Up by over 40 per cent a year

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The online music market is set to rocket at the rate of 43 per cent a year, making it worth $6.2 billion (£4.4 billion) by 2006, according to Jupiter Media Matrix. And, unsurprisingly, AOL-Time Warner wants to be sitting right in the middle of it.

Jupiter reckons subscription services rather than downloads will be the future of online music, and online music as a whole will account for 32 per cent of all music sales in 2006.

AOL will be happy with that crystal-ball gazing as it announces its online plans today. The corporate giant is setting up the AOL Artist Discovery Network, a subscription-based service, that will contain music from a range of music labels and not just those owned by AOL-Time Warner.

It will also go into detail about its Internet radio programme Radio@AOL. Both these will of course link in with MusicNet, the initiative set up by it and other music groups that wish to wean people off the free Napster model and get you paying for their artists.

One of those in on the MusicNet subscription model, Vivendi, today announced better-than-expected second-quarter results. Turnover was up 16 per cent to £4.03 billion and earnings up 57 per cent to £800 million. Not that any of this came from Internet music companies. But it does demonstrate that the vast media conglomerates looking to take over the online music market are in rude health.

Also, AOL-Time Warner is expected to announce today that it will buy UK magazine publisher IPC for £1.1 billion. The two have been arguing for months over the exact figure, which has swayed between £1.0 billion and £1.3 billion. Seeing as it will mostly likely come out as £1.1 billion, it looks like AOL got the upper hand. ®

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