“MTV will make the hookup with MusicNet (which is a joint venture composed of RealNetworks and a trio of music companies — Warner Music, BMG, and EMI) to create and brand a new online music-download operation. MusicNet already supplies its services to Time Warner’s America Online users and will be assisting the Virgin Group in its attempt to buy some real estate in this growing arena. No specific start date has been announced, and pricing tiers have yet to be determined,” Steven Mallas writes for The Motley Fool.
“MTV will have to compete with Apple (Nasdaq: AAPL) and its army of iPod devices, [but…] even though MTV has its work cut out for itself, my instinct tells me it is going to do well and eventually grab a ton of the mindshare available for this sector. Why? I’ve got one word for you (and, no, it isn’t plastics): brand. The equity inherent in those three letters, coupled with the formidable relevance and resonance they hold with the technophile teens and collegiate dudes across this sphere of ours, makes me think that the cabler will be able to monetize the strong relationship with its hip viewers even further than it already does… This area is sure to grow, and my gut hunch is that either MTV or Wal-Mart will end up being the dominant players somewhere down the path,” Mallas writes.
Full article here.
MacDailyNews Take: The MTV service will not work directly with Apple’s iPod as we understand it – the same problem Wal-Mart, Napster, Sony, etc. face. There are over 3 million iPods in users’ hands already and the number is growing rapidly. Selling leaded gas (Real or WMA or ATRAC3) when most want unleaded (AAC) doesn’t seem like a winning proposition to us.
I am not supporting the comments by the MFool, but Apple should continue to carefully watch the development of the on-line music market. Those 3 million iPods are a drop in the bucket compared with the potential overall market, and they have a somewhat limited lifetime (few years or so) before being subject to replacement. If old iPods are not replaced with new iPods and/or if another player gains the favor of the “in” crowd, then Apple could certainly see a diminished future role in on-line music. Add to that the fact that Apple does not own the content that they are selling on-line and you have the potential for a major drop in future revenue and marketshare. I wouldn’t advise Apple to move away from computers as the core of their business unless the IBM CPU development turns sour in a big way. Even then, Macs based on an AMD or Intel CPU might be a better answer than folding on the computer business altogether.
The Sony Walkman had its time. So did the Atari and the Commodore and many other electronic gadgets. The iPod will eventually become a commodity item – it’s just a matter of when.
Tommy Boy:
I am not sure I have ever watched MTV.
I live in Canada where we get to have “Much Music”. I am exposed to it more than I might like, as I do have a 15 year old son who is often tuned in. Very occasionally there is a concert broadcast of someone I like, and I actually watch then.
I suppose other governments may not be so intent on protecting us from US “culture” as ours is, but I still make my point that MTV is *not* a significant international brand, and Apple *most definitely* is.
Mike
Looks like just another form of oligarchy ganging up to destroy the “new” boy in town. Great. Down with capitalism! Rise, ye workers of the world!
SSDD from the Fools … no matter how positive the rest of Wall Street is about Apple, the Fools are Bears.
Consider the source. The Fools may do well in other areas, but when it comes to Apple they rate high in Thurrottness.
Atomic Bomb: if justanyone can use AAC/Fairplay, then why the hell would glaser bother begging SJ to open up the iPod/iTMS? You should think before u speak. No product as popular as the iPod would go without a thousand duplicates if they could, theycant. They can usse AAC, but I would bet my knickers that Apple has an exclusive deal for Fairplay or owns a part of the technolgy that they wont give out.
As for the article, first it was Napster “brand power”, then MS and Sony “marketing tech giants” were gonna bring down iTMS, now its MTV “minshare” and Walmart “cheap as we can get it” that are gonna do it? I dont think so. Plus they all leave out one of the most important markets, Mac users.
Atomic Bomb, I have to agree with Buffy. The AAC/Fairplay combination is under Apple control. At some point of the game I think they should license it out but they seem to be on a major continueing roll at this point and should capitalize on it. I just hope they time it right and don’t wait too long.
Jack A and Buffy,
Any application – even those running mobile devices (including cellphones) – can utilize the Quicktime codec that governs the AAC/Fairplay DRM. I know this because I write such apps.
How do you think iPhoto, iMovie, RealPlayer 10, and any other app that runs Quicktime (including the iPod OS) can play iTMS-purchased songs?
It’s not an opinion, folks, it’s just fact. The reality is that Glaser was looking to do it without distributing the Quicktime codec. That’s the key.
another company that knows dick about software..with nowhere near enough brand equity to support some crappy musicnet service..
walmart brand equity? anyone here who wants to tell me how walmart does not dilute the ‘hip’ factor of a music service?
as for mtv.. they are not that relevant these days. Music is music..and young ppl are still obsessed w it.. but mtv is not a big deal.
But doesnt Apple control the Quicktime codec? You cannot tell me with a straight face that not a single mp3 device maker around the world has a person smart enough to say “lets make an iPod rip off that plays music from that also hugely popular iTMS.” Is everyone afraid of Quicktime. I take your word as a programmer that such devices are possible, but take may word as a marketer, there is no way that this band wagon would not been lept upon if there were any open seats.
Buffy,
Any developer can create apps that utilize the Quicktime codec (http://developer.apple.com/quicktime/), but the issue is that companies would generally not like to distribute or base their business on software owned by another company. Format (WMA, AAC, etc) yes, but not applications. In this case, they wouldn’t want to depend on a user having Quicktime. But Real did it with RealPlayer 10, so it isn’t unheard of.
Imagine where Sony (for instance) would be with their music player if it needed Quicktime to run and then Apple said, “hey, we don’t like competition so we’re going to lock-down Quicktime so that only Apple apps can plug into it.” I know, that sounds like only something that Microsoft would do (and has), but that’s the thought that’s out there.
On the flip side, Glaser asked Apple to open up the authentication scheme that Quicktime uses. For obvious reasons (namely all those long-term contracts with the record labels) Apple isn’t going to want to do that.
One other thing, Buffy…
Ever tried to play an iTMS-purchased song on a Nokia 5510? You should. They sound great.
OK. Thanks for the info, I like to know when Im misinformed. So riddle me this. Why are so many companies willing to base their bread and butter on liscenced MS technology?
Thanks for the link. Now everytime I see another person say “iTMS only works with the iPod, its a closed format” Ill be sure to pass the link along.
i still don’t understand the problem. really!
if the other music stores develop their own DRM on top of AAC/MP4 and then offer that DRM freely to Apple, so that Apple can include it in to the iPod, iTunes and QT, then the problem would not be there at all.
it would be a win/win situation.
The other music stores can also sell music to iPod users and Apple can sell more iPods. Remember that the iTMS is primarily there to drive iPod sales… more music stores could drive more iPod sales.
is that really so hard to understand?
young, hip, cool don’t like commercialized, mass culture, everyone else. Apple somehow has tuned in to the fact that much of music is driven by its esoteric factor. If a certain music becomes TOO popular, some people stay away from it just for that reason. Music, unlike films, are real expressions of personality and background. People use music to define themselves to others. That’s why iTunes sharing is so popular. However, who would tie themselves to Walmart, or even MTV? Apple’s small market share but big mindshare actually works for them. They don’t smell, look, or feel like the corporate sponsorship or crass commercialism of MTV, or the worse lowest common denominator of Microsoft. Instead, they feel like what individuals like to feel – unique, unusual, hip, cool, etc. Everything this guy thought MTV might be. That’s another, and I think, critical reason why Apple has not licensed their iPod or format. They have been fortunate in that music prefers the “clubby” or “cliquey” feel, unlike computing.
With this in mind, it’s amazing how many people, especially journalists, fail to understand the continuing draw of Apple. I know of half a dozen university students in an ivy league institution who don’t buy music, would never buy music, yet, absolutely have to have an iPod because anything else would be embarrassing. So, all to Apple’s benefit, after all.
Now, Apple, to Europe – and beyond!
finelinebob – forgive my inability to decode the letters you used above – but what does SSDD stand for? Please enlighten me.
AB, how do you have one of those Nokias? I thought they didn’t work in the US because of the GSM frequency you have there.
Dave, I don’t use it in the States, but it works fine in India.
Do I have you down incorrectly as an American, AB?
Sorry, probably none of my business, but it does help me picture everyone when I’m reading the comments.
most windows users avoid apple itunes thinking it is an apple only product. apple needs to work on this…
Every one of the iTunes+iPod ads have “For Mac and Windows”
The media seemed to hot on the fact that Apple makes no money out of the online music store, it was just a ploy to sell iPods….
Why then is all and sundry out to get a slice of this nothing pie ?
Dave, I am American, but they don’t keep me chained down here… yet.
MTV as a brand name to turn the tides?? I don’t think so.
I think Sony has a better chance than MTV to compete. One thing people don’t talk about much is the speed/quality that Apple comes out with their software and/or software improvements. This is the biggest threat to all the other music stores…competing with Apple improving and adding features to what is already great to begin with. I think the speed of the OS upgrades/features/iApps is amazing.
AB, you don’t secretly work for Dell No customer service/support in India do you?? ha