AOL: Online music's next king?
Published: 06 Dec 2000 08:58 GMT
America Online may do with music players what it has done with instant messaging -- become a kingmaker, a new report from Jupiter Research suggests.
Analyst David Card believes that AOL is poised to make a serious run now that the market for music players -- dominated by RealNetworks's 135 million RealPlayer installs -- is entering a new phase in which cobbling together programming and information into a neat package will be key to its success.
Aside from AOL, the Jupiter analyst also sees Microsoft's MSN Explorer poised to take advantage of a market "no longer being a matter of codecs, user interface, distribution, or even the number of signed labels".
"The key to music player success is integrating the software with programming and promotion," Card said in a telephone interview Tuesday from Los Angeles.
America Online's 6.0 version, released at Internet World, certainly is a crazy quilt of software and content, including WinAmp, the music player Spinner, and either content or software from RealNetworks, Launch Media, CDNow Online, SonicNet, MTV, and RollingStone.com, Card wrote in a recent analysis. For instance, he added, AOL's new programming, which has a RealPlayer embedded into it, is haphazard and sometimes makes arbitrary choices, such as using RealNetworks for streaming but not in its jukebox application.
And, "as usual, most of the software [in AOL 6.0] is one revision behind the state of the art," Card said. "But AOL is the master of promotion," Card added, noting that AOL Plus broadband content appears to promote music clips and downloads. The Music, Entertainment and teen channels also offer up a melange of listening, download, and retail opportunities.
AOL is also in the midst of buying Time Warner and all its content, which potentially could be offered in premium services such as AOL Plus, which broadband users can employ to access video and audio files.
AOL is keeping its music player plans secret for now. A spokesman for the online giant said this week that "we don't talk much publicly about our plans for a music player." He declined to comment on Card's assessment.
If it will truly rise to the top, AOL will likely have to overtake a pack of media players now on the market. According to PC Data statistics, RealNetworks is the industry's 3,000-pound gorilla, reaching an estimated 64 percent of all home PCs.
Microsoft's Windows Media Player 6.0 or higher is a distant second, reaching about 39 percent of all home PCs. Winamp is third, with 14 percent market penetration.
The rest of the media players are bunched together, with none claiming more than 1 percent of the home PC network, according to Jerry Giganti, PC Data Internet analyst.
Giganti doesn't see RealPlayer losing its grip anytime soon. As Card noted as well, RealPlayer already has an edge in delivering content especially because it has launched a content-based subscription service.
But the future landscape isn't as crystal clear to Giganti. He thinks RealPlayer's massive short-term success will be enough to hold onto the top spot for a while, but after that, "Microsoft, AOL, they all have a chance. I don't think there's a real long-run favourite," he said.
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