MTV Closing Urge Music Service, Merging With RealNetworks' Rhapsody; Verizon Deal

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The news was supposed to be announced at a press conference tomorrow at 11 A.M. in NYC, but WSJ jumped the gun on it (to be fair, no one cared about getting journalists under embargo): MTV Networks (NYSE: VIA) is closing its poorly received online music service Urge, and is merging it with RealNetworks’ (Nasdaq: RNWK) Rhapsody music service. This means Urge’s hyped partnership with Microsoft is over and done with. Of course, MSFT launched its own Zune service a few months after Urge launched (Zune’s online client was built on top of Urge).

Update: Verizon will provide mobile distribution, according to a Journal source. The Journal suggests this will help the two tap into frustration with Apple’s decision to limit iPhone distribution to AT&T.

— The JV would give Real a major boost in terms of promotion via MTVN. The Journal was told the companies pressed to make a deal prior to the MTV Video Music Awards on Sept. 9.

— MTVN’s Michael Bloom will head the effort, according to the Journal. MTVN will contribute extensive content, including music blogs. No sense yet of how much MTV will contribute to actual music programming or how this will fit in with Real’s various other efforts. including RollingStone.com.

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