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AOL, MSN face off over music promotions

The AOL Time Warner and Microsoft units are entering a battle of the bands as they increasingly turn to recording stars to promote their online services.

AOL Time Warner's America Online and Microsoft's MSN Network are entering a battle of the bands as they increasingly turn to recording stars to promote their online services.

MSN said Thursday that it is hosting pop superstar Janet Jackson in an online chat and giving MSN subscribers the chance to purchase a limited number of presale tickets to her concert tour. Although the chat at 6 p.m. PDT Thursday will be free to everyone, the presale tickets are exclusively available to new and current MSN subscribers, the company said.

America Online, meanwhile, has been aggressively pushing stars from AOL Time Warner's stable of musicians, notably offering presale tickets to subscribers this week for Madonna's highly anticipated concert series scheduled to kick off this summer.

The concert wars highlight the growing importance of music in the race for dominance on the Web. They also show the advantages of partnerships that meld online access and content, as epitomized by the $107 billion merger that created AOL Time Warner, analysts said.

"This is the year that the real heavy hitters are going to be getting into the digital music game in a serious way," said Aram Sinnreich, an analyst from research firm Jupiter Research. "Online events, historically, have been one of the best ways to raise awareness and participation in any kind of online service, so AOL and MSN have been using events of various kinds for years as ways to bring in new users."

The Janet Jackson promotion is not the first for Microsoft. In November, MSN launched a co-branded Internet service with pop group 'NSync, offering fans access to content specifically tailored to them, including exclusive electronic newsletters, photos, unseen video footage and special 'NSync-branded versions of the MSN Messenger and Microsoft Windows Media Player. The company declined to reveal how many new subscribers it received from the 'NSync deal.

But analysts said AOL has the upper hand in the contest, thanks to its recent merger.

"AOL definitely has one advantage: access to Warner music, which is what MSN doesn't have," said P.J. McNealy, an analyst at research firm Gartner. "But this is still early on in AOL Music. They still haven't done much with music up until the announcement last month. (However), MSN hasn't licensed any deals with the Big Five they need to get on board."

AOL said that with its Madonna deal, it sold out the block of tickets reserved for current members in 1 hour and 45 minutes--a situation that left some subscribers unhappy when they were locked out of the deal. One fan who contacted CNET wrote in an e-mail that many subscribers were greeted with nothing but busy signals when they tried to take advantage of the promotion.

An AOL representative said the problems affected only current members and that tickets are still available in a second block reserved for new members who sign up during the promotion.

"Obviously this was a concert with high demand, and our members responded so enthusiastically to it," the representative said. "On the AOL end, the servers never shut down or anything like that. It was just a slow process."

The representative said the problems were similar to when people call for concert tickets over the phone and find that all lines are busy.

media Sinnreich said that although the Internet service providers are never going to completely eradicate customers' bad experiences, they can make some significant strides toward improving overall quality, such as providing enough bandwidth, resources and customer service.

"Back when most online events were completely free, open-access events...nobody minded that they got booted off because, hey, it was free and it's experimental," Sinnreich said. "But if you're selling these bill of goods as part of a paid service and you're trying to build brand equity for something that you hope to charge for month after month and year after year, you better make sure it works well."

MSN said it is confident that its service will be able to meet the demand, and it doesn't anticipate having difficulties as it provides new and current subscribers with the presale tickets. The company, which began selling tickets Monday for the first three concert dates, plans to offer tickets a week or two before they go on sale for each subsequent concert date. The tickets range in price from $45 to $120.

The company added that new subscribers will receive one month of service free but will be required to pay $21.95 per each additional month. It said subscribers do not have to maintain the service for a specific amount of time. AOL, however, required people who signed up for Net access during the Madonna promotion to maintain the service for at least three months.

"MSN's vision in the music space is really about providing the best digital music experience for consumers online," said Amanda Casemore, product manager in MSN marketing. "We really feel like this is going to revolutionize the way people are thinking about their online music experience. Moving forward, we're going to provide more personalized content and subscription-based service that will make MSN customers' destination for all their music needs."