“America Online plans to use Dolby Laboratories’ streaming audio technology in its Internet radio products, swapping out software from the service’s former provider, RealNetworks. As previously reported, AOL has been planning the switch to Dolby AAC (Advanced Audio Coding) for months, in the latest sign that the digital audio format is gaining momentum against competing technologies such as MP3. With Wednesday’s announcement, AOL will become the latest online music service to embrace AAC, a technology developed by Dolby, AT&T, the Fraunhofer Institute and Sony Electronics. Apple Computer’s iTunes Music Store also distributed music files encoded with AAC, although Apple has created its own security wrapper,” writes Jim Hu for CNET News.

“Online subscription service MusicNet, which is owned by RealNetworks, AOL Time Warner, Bertelsmann and EMI Recorded Music, will also support AAC as one of many audio technologies, MusicNet CEO Alan McGlade said in a previous interview. The Moving Pictures Experts Group (MPEG) has endorsed AAC as a specification in the latest version of its digital media standards, MPEG-4, and it could emerge as a challenger to MP3 and Microsoft’s Windows Media audio format. In a separate announcement, Loudeye said it will encode 1 million music files into Dolby AAC for AOL’s radio services,” Hue reports.

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