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AOL Offers Video Buyers Simplified Payment

18 Jul, 2003 By: Holly J. Wagner

America Online users have a new one-click shortcut to choosing and paying for home entertainment software with the opening of AOL Shop: Music, DVDs and Videos.

“Our focus is on building an entertainment destination,” said AOL spokeswoman Ann Burkart.

For now, the only DVD titles available on the service are Warner's The Matrix and sister company New Line Home Entertainment's The Lord of the Rings: The Two Towers. A full-scale rollout that will offer a broad variety of titles is scheduled for the fall.

AOL users will be able to choose DVDs, videotapes and CDs from an AOL shop and pay for them from their AOL wallets or by having them billed to their AOL accounts.

That gives AOL a captive audience of about 25 million subscribers to whom it can market the new e-commerce channel. About 12 million of them a month already visit the MusicNet music download area alone each month, Burkart said.

“This is to connect the dots to make it a compelling commerce opportunity. Beyond the physical goods, our vision is to have that digital product,” which may eventually include downloadable movies, she said.

“At this point, we're offering members an easy way to buy CDs, DVDs and videos with one click from within the programming environment,” she said. “We've just started rolling this out. On an ongoing basis, we'll be looking into additional commerce partners and consumer propositions that will add benefits to our members.”

The Internet service provider (ISP) isn't severing its relationship with Amazon.com, which previously handled entertainment software sales for the ISP. Non-AOL subscribers will still be able to access nonmember areas of the AOL entertainment space, with their purchasing opportunities routed through CDNow.com, for which Amazon handles fulfillment. Those who use other ISPs to access the Internet also will have to continue paying for purchases by credit card.

Amazon will no longer handle fulfillment for customers who buy through AOL Shop: Music, DVDs and Videos store. Alliance Entertainment will pick up fulfillment chores for the new channel.

“I think it's important to understand that what's really happened is a change in AOL's relationship with CDNow,” said Amazon spokesman Bill Curry. “Our overall strategic relationship with AOL is ongoing. The [CDNow] links represent a very minor part of our overall business.”

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