A Little Net Music?

Since America Online Inc. and Time Warner Inc. announced plans to merge, both AOL Chief Executive Stephen M. Case and Time Warner Chairman Gerald M. Levin can't seem to say enough about the important role that digital music will play in the new behemoth's efforts to dominate New Media. "We have the opportunity to create a personal jukebox in the house and the car," Case told BUSINESS WEEK recently. "Ten to 20 years from now, we'll think it was a silly notion that music was so tethered to a physical disk." Levin adds simply: "This is the takeoff point for the music business."

Apparently, there's more than merger-induced hyperbole at work. Just two weeks after announcing the record-setting deal to merge with AOL, Time Warner announced a $20 billion deal to take control of EMI Group, melding it with its Warner Music Group. EMI is the record label that first put Caruso on a platter, signed the Beatles, and is now home to such acts as the Spice Girls and Garth Brooks. Warner's list includes Madonna, Jewel, and R.E.M. The combination will give AOL Time Warner as much as 30% of the world record industry, compared with the 27% held by current No. 1, Universal Music Group, a unit of Seagram Co.