Big portals compete in music space

Somewhat naive but interesting piece in CrainsNY on the competition between AOL Music and Yahoo’s music services. (Caught my interest because I worked at AOL and have some related experience.)
As Crain’s points out, in recent months Yahoo has eclipsed AOL Music in a big way–AOL Music had 17.5 million unique users in July, according to ComScore Media Metrix, but Yahoo had 25.1 million uniques, a number they apparently reached, in part, through linking Launch Radio, part of their music product, to Yahoo Messenger’s toolbar.
AOL, however, has a broader and more diverse set of products–and a variety of revenue streams from them. AOL has been working on building a strong music platform and strategy for the past 4 years, ever since Kevin Conroy came from BMG; for AOL marketers, music is one of the key benefits to retain AOL subscribers at 23.95 a month.
AOL’s artist-focused products include First Look (new releases from known artists), Breakers(new and emerging artists–they helped break Michelle Branch in a big way), and Sessions@AOL (streamed and VOD shows and interviews). In addition, there is a strong streaming Radio product, a well-integrated music search and ecommerce offering, and pay for play music downloads.
AOL’s sales teams have also focused on music and entertainment as powerful sales categories. Deals with Coke, Volvo, Doritos and American Express and Burger King have all been driven by strong AOL Music hooks. In addition, AOL’s strong music product has brought in demographically focused music and entertainment advertising from Paramount, Universal and other studios. And, as Crain’s points out, AOL Broadband–where Kevin Conroy moved last year to act as COO–has developed a whole new set of music products positioned as core to the Broadband offering.
Yahoo’s Launch site has a similar set of offerings to AOL Music–radio, video, sample, purchase, search, buy. In some ways, it seems like a less robust offering–but it’s free and open to all, whereas AOL Music’s 17MM are a (hefty) subset of their subscriber base, with (some) additional users rolled in from their Netscape product. Furthermore, most of the risen in numbers has been driven by the integration of Launch Radio with Yahoo Messenger, which provided Messenger’s 22MM users with easy access.
The big news here, however, is investment–which the Crain’s piece NEVER mentions. Yahoo’s purchase of MusicMatch this week shows they are serious about skin in this game–not only do they get the core base of 60MM current users–they get the third-most-popular destination for music in August, with 9.8 million visitors, according to Nielsen–And they get a store that can bolster them as they sell against Apple–another player Crains’ reporter didn’t focus on.
(BTW, for consistently through coverage of news in the digital music space, check out Paid Content–Rafat does an excellent job!)