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America Online Businesses

AOL: Amazon Who? 108

Posted by timothy from the 900-lb-gorilla dept.
theodp writes "America Online said that it is now selling DVDs and CDs directly as part of its push into digital music, ending a temporary link it had with Amazon.com until it was able to do so itself. The step to sell physical CDs and DVDs is part of AOL's efforts to get a bigger share of the digital music pie to offset shrinkage in its dial-up Internet service and the slump in ad spending. AOL plans to build on its music offerings, which now include online music subscription service MusicNet, with a digital music store that will let users burn as many songs to CDs as they want."
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AOL: Amazon Who? More

AOL: Amazon Who?

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  • CD's... (Score:5, Funny)

    by Kewjoe ( 307612 ) on Saturday July 12, 2003 @08:36AM (#6423257)
    Does this mean they'll include music in those damn CD's they keep sending me?
    • Buying your internet access alone from America Online is dubious enough in it's justification. But buying your music CD's from AOL? That's tantamount to clinical insanity.

    • Re:CD's... (Score:5, Funny)

      by bj8rn ( 583532 ) on Saturday July 12, 2003 @08:56AM (#6423303)
      If you stick one of these cd's they send you into a cd-player, you'll find that there's some very avant-garde noise on it. Whether it counts as music is up to you to decide.
  • When you put these discs into a microwave.

  • And all this... (Score:2, Insightful)

    by Anonymous Coward
    ...from the guys that brought you Gnutella!

    rc55.com
  • AOL needs to get a more broad name going on here... especially since thier next offering will probably be 'Underwater basket weaving' Why not just 'Microsoft'
    • This should not suprise anyone. AOL is part of Time-Warner, which is one of the BIGGEST media and recording companies. This is just Time-Warner using AOL as an in-house storefront and reaping more profit by cutting out the distrubitor and retail middle-men. You should probably start to expect to see other Time-Warner stuff on AOL like movie DVDs and magazine subscriptions. I'm actually suprised this didn't happen earlier.

  • But this will be better! (Score:5, Funny)

    by xintegerx ( 557455 ) on Saturday July 12, 2003 @08:42AM (#6423272) Homepage
    Everybody knows Amazon will be done for. For, with every AOL STORE CD purchase, you get two CDs free of AOL's own choice!

    Even before you make a purchase!

    If you know what I mean... When you look at it this way, AOL is already the biggest CD distributor already, with the most CD's in the most homes (and trash cans.)
    • AOL is already the biggest CD distributor already, with the most CD's in the most homes (and trash cans.)

      Trash cans? Are you kidding? I bought a batch of CD coaster-ification kits from Jinx Hackwear [jinxhackwear.com] (it's under "Misc Swag"). Now I have the coolest coasters in town! AND my desktop isn't all sticky from the coffee that pixies slop all over the place when I'm not looking. (I would never be so uncoordinated as to slop coffee. Therefore, it must be pixies.)

      I was particularly thrilled at the most recent
    • AOL is already the biggest CD distributor already, with the most CD's in the most homes (and trash cans.)

      BMG? Columbia House?

  • What genius figured this out? (Score:3, Interesting)

    by gpinzone ( 531794 ) on Saturday July 12, 2003 @08:43AM (#6423274) Homepage Journal
    "We need a way to boost our profits now that everyone is dropping our worthless service and getting cable and DSL. Hmmm... I know! We'll sell music! Now that Napster is gone, we don't have to worry about piracy anymore. Wait 'till our stockholders hear this! This is almost as great as my idea for AOL Airlines."
    • Whoever thought it up must be married... ;)
    • Exactly - there was a recent article over at Slate comparing Amazon to QVC, basically making the case that QVC has been miles ahead of Amazon in terms of actually generating profits. So why is AOL pursuing a strategy that's proven to be a low-margin, highly competitive one? Who knows, they're desperate...
    • To be honest, Napster's not the problem, never was. The record industry's problem is too many execs are committed to a 50-year-old business model, and when the world changed, instead of changing with it, they are trying to change the world back to the 1950s.

      AOL should have looked at an Itunes model to distribute licensed cuts online at a dollar a pop. Maybe they'll prove me wrong, but opening up distributing warehouses shipping and fulfillment, based on a dying business model, and against competition such
      • Have you bought a CD from amazon.com lately? I haven't. Not because I get free music from some p2p site -- most of what I download is bootlegs that aren't available from a legitimate source -- but because amazon's CD prices are not particularly competetive. 2-3 years ago, I used to buy a CD or two from amazon everytime I got ahold of a gift certificate. Most of the CDs I'm interested in buying are list price at amazon.com (or higher, some places have a lower list price).

        AOL Time Warner could possibly se

  • to offset shrinkage in its dial-up Internet service

    So, wait, who is stealing AOL dialup? More interestingly, why would people steal AOL dialup?

  • AOL, service provider, dead at 8 (Score:5, Funny)

    by Anonymous Coward on Saturday July 12, 2003 @08:44AM (#6423276)
    I just heard some sad news on talk radio - useless and outdated service provider AOL was found dead in on the .com cutting floor this morning. There weren't any more details. I'm sure everyone in the Slashdot community will miss him - even if you didn't enjoy his work, there's no denying his contributions to landfills full of unopened CD's. Truly an internet bubble icon.
    • Make fun of them all you want, but they provide a great service, and they are virtually everywhere in the United States! The offer streaming radio with several channels of music style.
      They also offer a call alert feature which is great for dial-up modems. I could get a voice mail box from my phone company, but they can't tell me who is calling (complete information) while I am online!
      On top of that, the caller can leave a message, and I have an option of listening to the message while remaining
  • With your subscription to Music.Net you get unlimited suckage free of charge!

  • AOL became self-aware. (Score:5, Funny)

    by Comsn ( 686413 ) on Saturday July 12, 2003 @08:45AM (#6423282)
    on July 4th, 2004, AOL became self-aware, it took control of communications and launched an attack on us, the humans.

    3 billion people died that day.

  • Amazon (Score:3, Interesting)

    by xintegerx ( 557455 ) on Saturday July 12, 2003 @08:48AM (#6423288) Homepage
    Such a sad day for the company. They just lost an agreement with the biggest CD distributor in the country.

    • Re:Amazon (Score:2, Informative)

      by RALE007 ( 445837 )
      RTFA, it's a total of four tiny paragraphs, the first of which is:

      An AOL spokeswoman said the Internet division of AOL Time Warner Inc. had been using Amazon on an interim basis to sell CDs and DVDs. She added that its pacts with the online retailer are still ongoing.

  • Now what? (Score:4, Insightful)

    by nolife ( 233813 ) on Saturday July 12, 2003 @08:49AM (#6423289) Homepage Journal
    I'd imagine that even the newest of AOL users would still be able to type in www.amazon.com in thier web browser. I assume AOL will have some type of in your face promotion for this online but unless they can undercut Amazon and the other thousand or so places to by music online on the selection you want, they will just be another place to price check before buying.

    • Re:Now what? (Score:5, Insightful)

      by mrpuffypants ( 444598 ) * <mrpuffypants@gm a i l . c om> on Saturday July 12, 2003 @09:04AM (#6423318)
      And now that it's legal [slashdot.org] to show your own ads over another website what's to prevent AOL from popping up a window and saying:

      Whoa! Where do you think you're going?
      Click here to buy music from AOL!

      I think that AOL is a bigger competitor to Apple's iTMS than Microsoft's new stuff. While Microsoft always tends to include "cool" new features in each successive release of Windows that doesn't mean that people will use it. Also, if they push it through the OS then I'd jump on it with the Sherman Antitrust Act in a heartbeat.

      AOL users are already used to getting features incrementally, but I get the feeling with its userbase that ACTIVELY uses the features they include they could have great success with this service.

      I say bring 'em on; just like in the Brick 'n Mortar world there should be multiple CD stores on the Internet

    • Re:Now what? (Score:3, Funny)

      by Jardine ( 398197 )
      I'd imagine that even the newest of AOL users would still be able to type in www.amazon.com in thier web browser

      You'd think that, but you'd be underestimating the stupidity of an AOL user. Based on the users which have switched from AOL to an ISP I support, if they have the motor control to double-click a mouse 50% of the time they try, they deserve a gold star. This is what happens if you try to get them to find a web browser.

      Me: You have to open a web browser
      Them: Uh, what's that?
      Me: The program you us
    • I'd imagine that even the newest of AOL users would still be able to type in www.amazon.com in thier web browser.

      You'd be surprised... My grandma has been using AOL for 4 or 5 years now. A couple years ago she signed up for online banking with our small local bank. Instead of typing in the bank's URL in the AOL address bar, she types in the full bank name. That takes her to AOL's search page, and the bank is the first site listed, so she clicks that. I've tried explaining the whole "dubya-dubya-dubya

  • The end for the middle men? (Score:5, Interesting)

    by Realistic_Dragon ( 655151 ) on Saturday July 12, 2003 @08:50AM (#6423292) Homepage
    With the labels and the studios getting more and more involved in distributing directly to the customer, is this signalling the end for the middle men?

    People like Amazon will have a hard time selling music if everything from AOL Time Warner and Sony (for example) is only available direct. After all in the online space AOL TW has absolutley no need of Amazon - they are a big enough brand that people will be happy enough to buy things from them, and location is not an issue.

    Unfortunatly I can't see the removal of the cut that the middle man gets going to the consumer or even the artist.

    It'll be a good things for us geeks on a digital boycott of DRM enabled media however - you won't have to go looking to find out which ones are AOL TW productions, you can just avoid shopping at their e-store :o)
    • I'm really surprised that AOLTW didn't do this on a wider scale earlier.

      After all, AOLTW owns a huge music and film library, and they can easily support direct sales through AOL just from this library.
      • I'm really surprised that AOLTW didn't do this on a wider scale earlier.

        After all, AOLTW owns a huge music and film library, and they can easily support direct sales through AOL just from this library.

        I'm surprised as well. One of the concerns the FTC had about the merger was anti trust possibilities if the companies combined. One of which was if AOL and TW became one company, the media library could be restricted to only AOL customers. Part of the conditions of FTC approval was that the content still

    • It all depends which artists decide to stick with the traditional model of distributing through a record label. I personally hope that some will start seeing the light and realize that they can distribute independently-- and I would assume that places like Amazon.com or other big distributor names would be more than happy to help.

    • Re:The end for the middle men? (Score:4, Interesting)

      by John3 ( 85454 ) <john3NO@SPAMcornells.com> on Saturday July 12, 2003 @10:36AM (#6423541) Homepage Journal
      It could be the end for "middle men" like Amazon, but it might be a boon to local retail stores. Two of the primary reasons for retailers were distribution and returns. Manufacturers could not profitably sell one or two pieces of a product at a reasonable price.


      The manufacturer's plants are built to package and distribute cases and pallets of materials via truck freight, not individual sales units via UPS. They rely on retailers to break down the product to individual selling units and present the product for sale. Online retail has evolved to bring the costs down (expansion of UPS and other carriers, centralized distribution, computerized inventory control) so a manufacturer can effectively become a retailer.

      However, there are still kinks to be worked out with returns. We offer UPS shipping services at our hardware store, and unhappy consumers are constantly returning stuff to Amazon, QVC, etc., griping about what a hassle it is. It's much more convenient to return a product to a local retail store...quick exchange, no return shipping fees, and potentially the opportunity for the retailer to sell additional product while the customer is back in the store. Local retail stores still have a big advantage by offering convenient returns, so there is still hope for the middle man.

      John
      Cornell's True Value [cornells.com]

  • Biggest distributor of CD's maybe, but.. (Score:3, Insightful)

    by msgmonkey ( 599753 ) on Saturday July 12, 2003 @08:55AM (#6423302)
    it does n't mean anything because they're just distributing the same CD.

    There's quite a bit of difference between automated labeling of a single pre-packaged product such as the AOL CD and an order fullfilment process. Infact the only common denominator is that just happen to be CD's, there really is n't much overlap here.

  • Uhh huh. I see it coming (Score:5, Interesting)

    by dnoyeb ( 547705 ) on Saturday July 12, 2003 @08:58AM (#6423307) Homepage Journal
    The first step is to sell CDs directly without Amazon.

    The second step will be when Amazon's name mysteriously disappears from AOLs DNS servers.

    Third? The lengthy court battle...

  • AOL CD's oh boy, I can't wait... (Score:4, Funny)

    by Anonymous Coward on Saturday July 12, 2003 @09:00AM (#6423312)
    Will it be like this:

    You'll end up getting 3 CD's a week you didn't order?

    You'll call to cancel, but there is a fee, and the CDs keep coming anyway?

    When you try to stop playing their CD's, will your stereo / DVD player fail to play CD's from other sources?

    Will DVD Owners end up forming a class action law suit to regain control of their TVs?

    AOL - is that pronounced 'A - Hole's ? Right?

  • Will AOL become the Microsoft of the internet ? (Score:5, Interesting)

    by Krapangor ( 533950 ) on Saturday July 12, 2003 @09:07AM (#6423326) Homepage
    It seems that AOL aquires more and more customers and expands itself to more and more services.
    It story seems to me very similar to the history of Mircosoft:a single company with a proprietary, incompatible products steadily increased their market share by aggressive advertisement until they became the dominant monopolist.
    Don't be fooled by the fact that AOL is just a service provider. If they control over 70 percent of the internet access of private customers all players in the network business would have to follow their word and do their bidding. They could dominate standards bodies and in fact enforce proprietary standards locked by IP and patents on the whole internet.

    This makes me wonder if it's now time for a GPL service provider. By following the principles [eff.org] of the free software movement, they could set up free WIFI access to the internet. This would have the nice side effect that the US goverment won't be able to censor the internet any longer. Furthermore we might get all free broadband access without paying huge fees to greedy companies which do nothing for the community.

    • As soon as they work out the latency time issues in wifi, I'll make the switch. But right now it's too hard to bunny hop effectively with latencies as they are. I mean, the medics are even passing me by!


      I guess I just wanna have a bunny Hop-opoly.

    • Sheesh! What has GPL got to do with being an ISP? Nothing!

      Even if you follow up the principles of free software movement doesn't make you a GPL ISP. What's next? GPL ice cream?

      GPL is a software licence, don't try to make it into something it's not suited for.
    • AOL will never become the Microsoft of the internet. They got to where they are now by providing a user friendly experience over dialup connections. The vast majority of their customers are still dial-up too.

      However, where they succeeded in dial-up, it is unlikely that will continue onward in broadband. Dial-up is a lot easier to run, there is relatively little infrastructure to maintain besides the back-end internet connection and the phone bank. Broadband is an entirely different ball game. Especially n
      • I would just like to clarify that not all telcomm companies even care about residential customers. The one I work for only provides voice/data services to businesses, and then only business order 6 lines or more. Oh, and SDSL is the only type of DSL offered.

        As far as AOL competing in this space, I will not clam that it will never happen, but an AOL that gets business customers will need to offer quite a different product than the one they sell to residential ones.

        On the subject of CD/DVD sales, I see th

    • News for you buddy: they already are.

      How else is it possible that AOL managed to become AOL:TW?

      And they certainly didn't make it to the top by being 'easy to use' and reliable. They made it to the top by spamming people with CDs. In fact, their buisness model is a lot like merging Microsoft's strategy with a spammers:

      "Hmmm. Our product sucks and our sales are dropping.... Release a "new version" with pretty colors, but don't actually let people connect at better speeds. Also, rename features that oth

  • Dilemma (Score:3, Interesting)

    by mrpuffypants ( 444598 ) * <mrpuffypants@gm a i l . c om> on Saturday July 12, 2003 @09:11AM (#6423333)
    I realize they're talking about buying CDs and DVDs, but eventually they'll have to move it into Internet downloads like Apple's iTMS.

    Obviously they're use some type of DRM (most likely developed by their A/V gurus at Nullsoft....Frankel'll love that one), but once an AOL user leaves the collective will they still get to take their music with them or will they require AOL for the rest of their adult life?

    That it, until they lose another $99,000,000,000 this year and are forced out of business :)

  • it'd be so smart (Score:4, Interesting)

    by TomSawyer ( 100674 ) on Saturday July 12, 2003 @09:12AM (#6423338) Homepage
    It'd be so smart of them to leverage their Time Warner division by giving buyers of their own stuff the right to download the MP3s on the spot so they can listen to the music while their CD is in the mail.

    Or maybe just set up a playlist they can stream off the order status page of whatever they ordered. Once the order is fulfilled the playlist can go away along with the order page.

  • Who would really trust getting anything from AOL anyway? I mean it's one thing if I buy from Amazon and they mysteriously start customizing the home page to "fit my tastes" - which is sort of disturbing from a privacy sort of view, and also sort of disturbing seeing death metal stuff mixed in with anime on a front page. But if I had AOL and bought music from them, I imagine that the harassment would never end. I mean AOL is like a big commercial already, and with the control they have over their user's
    • True, but many of the people with AOL like having no control of the internet. To my parents (I didn't allow it before I left for college) just wanted AOL. It tells you when you have email. It tells you where to find your news, where to shop, and constantly gives you help and advice. They just didn't want to take the time to figure things out on there own. So AOL is providing what many of their customers probably want.

      Thankfully, for my sanity when I come home, my father has finally begun to use Net
    • I mean AOL is like a big commercial already, and with the control they have over their user's Internet experience, I can see major harassment to follow.

      It's not harassment. It's value-adding.

      AOL adds perceived value to a membership by offering AOL Call Alert for $4 a month, voice mail for $6 a month, premium packages that allow multiple concurrent sign-ins (for families) for $6 a month, and all sorts of co-branded programs from which they derive revenue. This music/DVD sales idea is no different from,
  • The music industry is really in dire straits when AOL can take the lead in selling music. But it is a good move, and probably good for consumers. selling music on disc and as downloads makes sense. I suspect we are seeing the slow but real migration of music distribution from offline retail to online retail. When Walmart start selling tracks you know it's finally happened.
    The more companies do this, the more competition and the better the choice for the consumer. If there is one single way to eliminate those pesky P2P people, this is it.
    Oh, and AOL, while you're at it, please start planning to sell TV series and movies the same way.
    • It says right up at the top that they're going to sell CDs and DVDs.

      Where are you getting the 'innovator' impression from, and why do you propose they start selling movies when it sounds like they're already going to?

      They're not selling 'tracks' nor are they moving into the P2P market.
  • I have never bought from Amazon due to their early reputation as spamming their customers regardless of whether one chose to receive "valuable offers" over email. They got this reputation and nickname in spam abuse circles from the early days of their business several years ago. I have never bought from them because of it.

    I was just wondering if they are still doing this or if it is now possible to buy from them and not get spammed to death.

    • Re:Is Amazon still Spamazon? (Score:1, Informative)

      by Anonymous Coward
      I've bought from Amazon many times, I've never received an email from them except for order status and confirmation, etc.
    • I've bought from Amazon all the time, and I've never received a promotion I didn't ask for. The unique e-mail address I use for Amazon has never been used for any other purpose than informing me of my order status.

      Geeks sure can hold grudges.

  • My question is, will the strategy of selling to a declining population (as people leave AOL for other Internet providers) be worth it in the long run? Sure, AOL/TW can make money off their subscribers this way, but, as someone previously posted, when AOL users' anxiety over the Internet drops to the point where they look elsewhere for service, AOL/TW loses that potential sales channel completely.

    I don't think AOL is going away anytime soon, but unless AOL is also going to pursue an *outside* channel of sa

  • Here's a thought... (Score:4, Funny)

    by Kyouryuu ( 685884 ) on Saturday July 12, 2003 @11:26AM (#6423715) Homepage
    Here's a thought.

    If AOL really wanted to save money, they'd stop supplying every friggen' store and consumer in America with two thousand CDs whenever a new version came out. :P

  • Free Music? (Score:3, Interesting)

    by heli0 ( 659560 ) on Saturday July 12, 2003 @11:58AM (#6423860)
    Why not just offer free streaming music of the entire TimeWarner collection of artists to AOL users? Seems like a decent way to attract customers.

    AOL does own the following artists' works: Frank Sinatra, Fleetwood Mac, Eric Clapton, Neil Young, James Taylor, The Grateful Dead, Talking Heads, B-52s, Doobie Brothers, Little Feat, Van Morrison, The Ramones, Depeche Mode, The Kinks, Paul Simon, Van Halen, Black Sabbath, Miles Davis, Randy Newman, Dire Straits, Prince, Emmylou Harris, Madonna, Linkin Park, Enya, Faith Hill, Red Hot Chili Peppers, Tom Petty, R.E.M., Disturbed, Goo Goo Dolls, Blake Shelton, Trick Pony, Seal, Green Day, Sixpence None The Richer, Steely Dan, Josh Groban, The Flaming Lips, Jaheim, SK, D'Mello, Souljahz, Brad Mehldau, Joshua Redman, Pat Metheny, Robert Randolph, The Used, Glassjaw, and Barenaked Ladies; as well as thousands of others.

    • Ok, before I just thought AOL was over restrictive, slow and advert ridden, but they own the copyright for Dire Straits songs?! it just got personal!

      And on a more topicesk note, Amazon has always been great for me, I have ordered numerous items from there (Including a Dire Straits DVD ;) ) their prices are good, items have allways arrived promptly and in perfect condition so I don't intend to stop using them, not that I would go anywhere near AOL's servers (Apart from AIM unfortunatly) even if Amazon ev

  • ...a digital music store that will let users burn as many songs to CDs as they want

    I burn as many songs to CD as want already. Nobody has to let me. As long as it's non-commercial, etc., it's everyone's right to do so.
  • Can they just go bankrupt already?

    I look forward to seeing all the questionable accounting and insider trading that the executives of that cancerous beheamoth is beyond a doubt guilty of.

  • Amazon.screwed (Score:3, Interesting)

    by Ars-Fartsica ( 166957 ) on Saturday July 12, 2003 @01:01PM (#6424130)
    There are so many guns pointed at Amazon.com right now, I would say that the future of the firm is threatened. The loss of AOL is a minor issue. Amazon more directly faces undercutting from capable shipping merchants all over the web. Walmart beats Amazon on price nearly 100% of the time now. Overstock.com is also beating Amazon on items in stock. Amazon is also a massive debtor in markets with razor thin margins and massive competition. The massively overinflated AMZN stock is now subject to huge shorting positions, making it even harder to compensate employees in the future (almost anyone joining now will have underwater stock in two years).

    It will be interesting to see if they are around in five years.

  • Okay, so let's see if I understand this correctly...

    AOL, one of the largest (and arguably hoariest) national internet service providers around, is losing business because of some questionable business practices and needs to generate more revenue.

    In order to do this, they've severed ties with a prominent internet business (Amazon) and are going to attempt to run their own physical media music store...

    ... bearing in mind that the music industry is also taking a royal screwing due in one way or another t

  • The problem with "direct" sales is most record labels won't want to sell anything from the others. It AOL really going to sell Sony music? Nah. So are we going to have to buy music based on label not band?

    "Dude you can't get that at the Sony store. That's AOL".

    I'll take something like Amazon any day--very easy.
  • I bought Less Than Jake's new CD called Anthem in a prerelease special. Buying direct from the record company gave me the bonus of having it [supposedly] autographed by all five members of the band, but guess what else? It was copy protected.
  • The bias in many of these comments is very sad. They seem to suggest that we should ONLY buy music from amazon? Competition is bad now?

    The more people that sell music etc online, the more likely it is that we will be able to get music the way we want to.
  • So, people are probably wondering "Why doesn't AOL just open an online music store like Apple and integrate it into their browser?" Simple. AOL is too damn slow, and they know it. It would take *years* to download a cd from them.

    (Plus, as was already noted many times above, they are already good at making a lot of CDs.)
  • You wouldn't enjoy the music they gave you one those CDs. It would be the same stuff that's sold in gas stations and truck stops throughout the world.
  • Hmm, I was under the impression that AOL/Compuserve learnt that craft years ago.

    I wonder how much land one could cover with all the unused CS CDs that were included with PC mags over the years.
  • Ok.. so I haven't seen anyone mention this yet...
    Go to http://shop.aol.com ...click on any one of the "shops" Now, Look towards the center-bottom of the page. Whats it say there? Yeah, thats right... technology POWERED BY AMAZON.COM SO... this means that Amazon gets to furnish aol with the sales software and all the other DB workings.. but not have to deal with Physical inventory or warehousing... This means that Time Warner can deal with all expensive stuff and Amazon just keeps raking it in.
  • AOL trying to break into the DVD/CD market is going to end up what K-mart tried to do with its dial-up service. (We all know how that went.)

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