AOL Buys MusicNow

Time Warner Inc.’s America Online Inc. unit said Thursday that it purchased online-music company MusicNow from Circuit City Stores Inc., and it will offer AOL customers the ability to download songs through both subscription and a la carte pricing packages.

AOL said the deal was signed Sept. 27, and it closed earlier this week. MusicNow was founded as FullAudio in 1999 and purchased by Circuit City last year.

Circuit City and AOL didn’t disclose the value of the deal. Reuters pegged the price at less than $25 million, citing an unnamed source.

AOL said it will charge Web surfers 99 cents per song to download music to their computers, matching the price Apple Computer Inc. charges consumers at its iTunes store.

AOL will also offer a $9.95 monthly-subscription option, which offers unlimited streaming and downloading of songs to a computer, and a $14.95 monthly option, which includes unlimited streaming and downloading to a computer, in addition to the ability to download songs to portable music players.