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February 10, 1999


By CBR Staff Writer

America Online Inc has made a deal with Columbia House, a direct marketer of music, videos and DVDs. The deal covers online and offline ads and promotions, including product bundling, direct mail initiatives and co-marketing and ad campaigns. Columbia House, which has 13 million Club members, plans to hawk its wares though AOL’s Shopping Channel and on, CompuServe, Digital City and Entertainment Asylum. In return, the company will distribute AOL software to its own members and has guaranteed a minimum number of new memberships for AOL. The companies did not disclose exactly what the multi-year agreement is worth, saying only that it amounts to many millions of dollars. Music and videos lend themselves to e-commerce almost as readily as books. Competition for the market has exploded, especially since launched a CD store in June 1998 and CDNow merged with N2K in October (CI No 3,524).

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