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MTV+Real+Verizon Vs. Apple & iTunes

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[qi:031] Update#2: The digital music joint venture aimed at Apple (AAPL) and unveiled earlier today by RealNetworks (RNWK) and Viacom’s (VIA) MTV is 51-percent-owned by the digital media company, notes paidContent.org’s Rafat Ali, who dug up Rhapsody’s related 8-K filing. MTV’s stake will be 49 percent.

Update: It is official! Real Networks, MTV and Verizon Wireless are teaming up to form Rhapsody America, a joint venture that will be headed up by Michael Bloom, former general manager of MTV Urge. The company will have offices in San Francisco, New York, and Seattle. On-air integration for the new service will begin next week and Rhapsody will also be integrated into the fabric of MTV’s marquee event, the Video Music Awards airing live from Las Vegas on September 9th, 2007. Verizon will push Rhapsody via its stores.

Van Toffler, President of MTV Networks Music said: “The new Rhapsody will have the marketing power of MTV, VH1 and CMT behind it.”

John Stratton, executive vice president and chief marketing officer of Verizon, added, “Together, our three companies will provide a new, unbeatable digital music experience that will give every consumer a way to get music quickly and easily – whether sitting in front of a computer screen or on-the-go with a mobile device.”

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Older post, below the fold:
MTV Networks, a division of Viacom (VIA) is merging its Urge music service with Rhapsody, a music service offered by Real Networks (RNWK), the Seattle-based software and media company, according to The Wall Street Journal. The two companies were set to make the announcement tomorrow, but WSJ broke the story. It is not clear what the final entity would look like, but it is clearly a joint venture of sorts.

Verizon and Vodafone have has signed on to be mobile distributors of this new effort, which is going to be led by Michael Bloom, currently CEO of MTV Urge. An MTV-branded, Real-powered service on Verizon and Vodafone could act as a counterweight to Apple’s iPhone-Cingular juggernaut, but I wouldn’t count on it, for MTV has a history of blown chances. Meanwhile, there has been some talk of Vodafone getting the rights for Apple’s iPhone in Europe.

MTV had established Urge in partnership with Microsoft Corp., but let it whither away mostly because Microsoft launched its own Zune device and service. (It got Zun.k.ed!) In recent years, MTV has started airing reality television shows and sitcoms, and has lost some of its all-music-all-the-time cachet and audience.

The music loving audience has moved on to newer online communities such as Last.fm, which is now owned by CBS, a company that was spun out of Viacom. Last.fm could provide a big boost to this “mega-attempt” to take on Apple and its iTunes service.

Nevertheless, thus far any such attempts have not really had any material impact on Apple. Still, the deal could prove to be a boost for Real, which can finally get some airtime for its Rhapsody service. Real has been pushing a “Real-everywhere” strategy, and has already embedded its service into devices such as Nokia’s N95 and Sonos’ media player.

Also check out my interview with Real Networks CEO Rob Glaser on The GigaOM Show.

10 Responses to “MTV+Real+Verizon Vs. Apple & iTunes”

  1. A joint venture of MTV, Real and Verizon would be formidable competition for anyone, including Apple iTunes. This is a huge market, for online music, and investment can run very large because of the potential revenues. GD.

  2. As noted above “three losers don’t make a winner”. How many more millions must be wasted by “me too” executives. Get over it; Apple got it right. MTV/Viacom, you teenie-bopper demographic isn’t going to pay for your content. Verizon, spend your dollars wisely (read: get a deal favorable for you and Apple, bringing the iPhone online to your network). It’s really ridiculous (and quite sad, frankly) that this continues. I’m all for competition, but I see nothing new here. Meanwhile, Real tries to remain relevant. Sorry, but you know it’s true.

  3. I can access my Rhapsody library over the web, from the full-client jukebox, from my Sansa R, in my house via Sonos (without a pc), and soon over Tivo. For $15 per month. I also own two current generation ipods and 15k tracks. My point is that not everyone is looking to these services to replace itunes/ipod. Some of us use them to more easily do the things apple has not offered (celestial jukebox, subscription model, etc.).

  4. Howard Le Ducke

    If you added up the marketshare of all the Windows DRM based services, it would total what – a mere 10%? These guys are fighting for table scraps and teaming up together to lower costs and up their perceived marketshare. Yes, in one fell swoop, MTV’s Urge went from 0.5% marketshare to 3% by teaming up with Real and you can spin it as a 600% marketshare gain or you can see it for what it really is: the last desperate act of survival for a failing venture.

    Next up on GigaOm, Napster reports profits after laying off 99% of it’s staff.