Alex Zaharov-Reutt
Wednesday, 22 August 2007 15:44
Opinion and Analysis
Page 1 of 2
MTV has lost the URGE to keep playing with Microsoft, joining Real
Networks instead to offer music through a subscription download service
called Rhapsody America, for PCs and mp3 players, with Verizon
customers able to download music to their cell phones – but is it
anywhere near enough to defeat iTunes?
MTV’s deal with Microsoft to create the URGE music service in Windows Media Player 11 was launched with great fanfare at the CES Keynote presentation with Bill Gates a couple of years ago.
Unfortunately, being limited to only the US couldn’t have helped, but clearly being part of Windows Media Player wasn’t enough to get users to engage en mass, despite MTV’s large television audience worldwide.
Then to rub more salt into the wound, Microsoft suddenly switched tack to focus on their own incompatible Zune music player, clearly de-emphasizing the URGE relationship to some degree as Microsoft made their own deals with music companies, even agreeing to pay Universal a music tax for every Zune sold.
So, it comes as no surprise to discover that Viacom, the owners of MTV, CMT and VH1 channels, have decided that enough is enough with Microsoft and that they needed to be in control of their own destiny, at least to a greater degree than they were with a distracted Microsoft, who are fighting their own battles in the music player, video player, games console, operating system and business and hardware spaces.
This has resulted in Viacom doing a deal with RealNetworks to co-own and operate a music subscription download service called Rhapsody America.
RealNetworks will own 51%, and will supply the music download service which was previously named “Rhapsody”, all the existing Rhapsody subscribers, cash, some employees, contracts and other assets.
Viacom will own the other 49%, and will add its MTV Urge subscribers, cash, a five-year note for US $230 million, and other assets.
The service appears to only work with PCs running Windows, and works on most modern and recent mp3 players that don’t come from Apple (think Samsung, Creative, iRiver, Philips and many other brands).
So, the service doesn't work with the iPod, the iPhone or even the Zune, and has a few other obstacles in the way before any kind of music domination can ever be achieved. What else is in store for the Rhapsody America music service, and what's one way they could make their service much more appealing - and compatible - overnight? Please read onto page 2 for the conclusion...
