It was clear several months ago that Time Warner's (NYSE: TWX) America Online and XM Satellite Radio (Nasdaq: XMSR) were destined to make beautiful music together, but today the two companies took the idea one step further. They have announced a venture through which they will each provide live concerts to music lovers.
Along with Anschutz Corp's AEG, which produces concerts for the sports and entertainment arenas that it owns, XM and AOL will form a venture called Network Live. According to news coverage, AOL's streaming content offering of the recent high-profile Live 8 concerts went without a hitch, with 5 million people viewing the concerts online. Kevin Wall, who served as executive producer of the Live 8 shows, is currently CEO of the Network Live joint venture.
At this point, the content will be free, with revenues derived from advertising and license fees. According to the press announcement, the goal of the venture is to create a 24-hour platform for live entertainment.
When I initially covered the first announcement that AOL and XM would join together for a musical venture, I pointed out the obvious -- the current strength of music has been highlighted by the popularity of Apple's (Nasdaq: AAPL) iPod and the continued success of XM and rival Sirius (Nasdaq: SIRI) in roping in new subscribers.
Although AOL already offers free concerts and video, this move underscores that this is serious business. And of course, it's not lost on anyone that disseminating video content over the Internet is the hippest, hottest thing around these days, with Google (Nasdaq: GOOG) emphasizing that this is an idea whose time has come with its recent initiatives for video search. Of course, some kinks still need to be worked out in regard to the amounts of copyrighted material on the Internet, as pointed out here.
For XM, it's just one more satellite radio offering, but for AOL, it's yet another example that it's keen on change and opening up its content to a whole world of Internet users outside its old virtual gated community. Although there's wisdom in that tactic, longtime Fool Rick Munarriz recently pointed out one danger it faces -- that in giving so much up for free, the company runs the risk of alienating its paying customers. AOL continues to face many challenges with change, but at least, it's arguable that stagnation is no longer a concept that can bother Time Warner shareholders.
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Alyce Lomax
does not own shares of any of the companies mentioned, even though she recently learned that AOL and XM form an anagram for Lomax.
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