Why AOL Left Live 8 -- to Be Snared by Rival MSN

Despite Raging Success of Online Concert, Portal Says Model Was Flawed

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AOL left industry peers scratching their heads last week when it ended the partnership responsible for Live 8-last year's global concert seen by more than 100 million people on AOL and, the company admits, its most successful venture to date. Adding insult to injury, Live 8's producer Kevin Wall then took his act to MSN, which has signed on to promote and distribute 36 separate live concerts.

AOL's response? Good riddance. "The model that was presented was not working," said Erik Flannigan, VP-programming for AOL Music. "Being able to speak to the labels and the artists got harder to do when you had a separate entity striking deals to get commitments."

A year into their multiyear production and distribution venture dubbed Network Live, XM Satellite Radio and concert promoter AEG Live also have split with Mr. Wall. The question now is whether MSN, which did not return calls by press time, will encounter similar issues.

Mr. Wall, for his part, is optimistic. "Since Live 8, we have proven that there is a robust market for a company like ours to change the way live entertainment is consumed," he said.

Live 8, carried on AOL during the summer of 2005, was seen as a defining moment for both the portal and the internet as legitimate purveyors of entertainment on a grand scale. As of September, there were 90 million cumulative and on-demand audio and video plays.

By AOL's reckoning, though, there's no reason why Live 8's success can't be repeated independently. "What everyone's missing is that we produced the online coverage of Live 8," said spokeswoman Ruth Sarfaty. "[Kevin Wall] produced the concerts, but it was the online coverage and incredible response that was a first."

MSN is kicking off the launch today with a performance by singer/pianist John Legend live from the Royal Albert Hall in London. A performance by singer/guitarist John Mayer also will be streamed to MSN viewers from Webster Hall in New York.

The multiyear partnership with Mr. Wall's team, renamed Control Room, allows Microsoft to stream programming to platforms including Xbox Live, MSN Messenger, Windows Media Player and Windows XP Media Center Edition. Earlier this week, Microsoft announced the creation of a unified ad platform called Microsoft Digital Advertising Solutions, which allows buyers to manage campaigns across these various channels.

Mr. Wall's operation has distribute digitally some 59 events in the past year. It expects to maintain existing content-distribution relationships with TV, radio, theater and retail partners.
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