MTV-Microsoft URGE music service not targeting iPod, iTunes users; Real CEO PlayedForSure?

Today, MTV Networks and Microsoft Corp. today announced they have collaborated on the design and development of MTV Networks’ new digital music service called “URGE.” Set to debut domestically in 2006, URGE will be integrated into a forthcoming version of Microsoft Windows Media Player, according to Microsoft and MTV.

“MTV Networks declined to give details on URGE’s pricing, but users can expect to pay different tiers for a la carte downloads, subscriptions and for moving rented tracks to a portable music player, said Jason Hirschhorn, the company’s chief digital officer,” Alex Veiga reports for The Associated Press. “Similar services typically charge around 99 cents for an individual track and $5 to $15 a month or more for a basic subscription package.”

“The current version of Microsoft’s Media Player has built-in links to several music services, including MusicNow and Napster. A few months ago, Microsoft broke off talks with record labels to license music for a new online subscription service of its own. It did not explain the move,” Veiga reports. “Microsoft already sells song downloads on its MSN Music Internet site. Under the terms of MTV Networks’ agreement with Microsoft, URGE will stand out from other services, Hirschhorn said. ‘We will be the preferred service,’ he said, declining to elaborate.”

Veiga reports, “URGE will not be compatible with Apple Computer Inc.’s Macintosh computers or its popular iPod digital music player, a challenge the MTV Networks service will have to overcome, said Michael Gartenberg, vice president and research director for Jupiter Research in New York. ‘The biggest paradox is the people who are most likely interested in an MTV-branded music experience are also probably the demographic that has the highest interest in the iPod,’ Gartenberg said. IPods represent around 75 percent of the digital player market, and Apple’s iTunes Music Store accounts for around 80 percent of the licensed music download market, said Phil Leigh, a digital music analyst with Inside Digital Media.”

Veiga reports, “The MTV brand could help spark interest in non-iPod players, Leigh said. Hirschhorn said URGE’s focus will not be iPod users. ‘We think the iPod has done a great job. Our aim is not to switch people from iTunes and the iPod,’ he said. ‘We need to concentrate on where there’s going to be a bigger market.’ Still, the network will have to do a better job than other music services to sell consumers on the upside of subscription services. ‘At the end of the day, the iPod drives sales to the iTunes Music Store,’ Gartenberg said. ‘It didn’t happen the other way around.'”

Full article here.
Just about a month and a half ago, Real’s Rob Glaser settled his antitrust lawsuit with Microsoft for $761 million, but just over half of the settlement, $460m, was in cash. The remainder is to be paid for in services from Microsoft, such as advertising for Real’s Rhapsody music service on Microsoft’s internet portal, MSN. The deal put Real’s Rhapsody service in front of millions of MSN users. At the time of the announcement, Glaser was all smiles rolling through the halls of Real’s headquarters and said, “over time [Apple’s iTunes+iPod] will lose out because of the share of market forces against them.” Glaser’s decision to opt for access to Microsoft services, and not just cash, might just prove to be huge mistake that’s may be impossible to overcome. With this MTV “URGE” deal, it sounds like Real’s new partner Microsoft wants to finish them off once and for all. Gates may have just introduced Glaser to his time-tested concept “PlayedForSure.”

MTV’s hyperbole that they “need concentrate on where there’s going to be a bigger market than iPod+iTunes” sounds like very wishful thinking (dreaming) that we’ve heard many times before from online music outfits not named “iTunes Music Store” and from makers of portable digital music players not named “iPod.”

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Related articles:
MTV and Microsoft team up for new digital music service ‘URGE’ – December 13, 2005
Real’s Glaser: Apple iPod+iTunes ‘will lose out because of the share of market forces against them’ – October 29, 2005
Analyst: Real and Microsoft deal ‘doesn’t change the dynamics for Apple in any way, shape or form’ – October 12, 2005
Microsoft to pay RealNetworks $761 million antitrust lawsuit settlement – October 11, 2005
Piper: Napster, Yahoo, MSN, Real fighting for small slice of Apple iTunes Music Store’s pie – September 16, 2005

42 Comments

  1. They are not targeting iTunes? Come on! Give people some of indication that you think they are intelligent. Micrsoft has become the king of unhip and they are hitching they wagon to MTV to try and gain some sort of cool factor. They should have found a better wagon though. MTV? They haven’t really been into the music business since the mid 90s.

    MS can have all of the MTV music though. I would rather cut out major organs with a dull butter knife than to have to listen to stuff (aka rap and r&b) that MTV has on. That is when it actually has on music. I honestly gave up on Mtv as a music source over a decade ago.

  2. Microsoft just doesn’t “get it”!

    If and when they are ever able to produce an entire end-user experience with the simplicity and quality as iPod/iTunes, only then will they be any threat to Apple’s products. This announcement with MTV doesn’t bring them any closer to that end.

    The world is tired and is no longer willing to waste their time fumbling about trying to successfully piece together a digital solution, no matter what that may be. The age of computers being just the realm of geeks is gone; they should be as simple and as reliable as a car, perhaps even a toaster. Will Microsoft ever wake up to this fact?!

  3. MTV/Microsoft just doesn’t get it. The music sounds the same buying from URGE, Real or iTunes. So I don’t care where the music comes from. The difference is that the iPod is iconic, desirable, and works really well. I buy music for my player. I won’t buy a player for music.

  4. I don’t believe that the MTV crowd are the ones really targeting the iPod. I think it’s hitting a lot of other demographics now… people in their 30s don’t watch the garbage on MTV… and they actually have the money to buy an iPod.

  5. Our aim is not to switch people from iTunes and the iPod,’ he said. ‘We need to concentrate on where there’s going to be a bigger market.’

    so…what bigger market is he talking about? the mp3/music download market is only so big…and itunes/ipod has ~77% of that. You can’t just make up markets and say you’re going to dominate it.

  6. 1. MTV still plays music?

    2. MTV ain’t what it use to be so who cares.

    3. Have you used Microsoft’s Media Player? It’s crap. No scrubbing – just Junk.

    4. Apple already has access to music videos so where the missing deal for Apple?

    5. iTunes. Compatible with the iPods that are gifts this Christmas. MTV – not compatible with iPods. Think of all the people that won’t be shopping at MTV/MS. Oops!

    6. MTV – not with it.

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