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. The MTV guy must think iTMS only works on Macs, otherwise, his comment seems nonsensical! What bigger markets is he dreaming about?

    And, the music industry, though they may be unhappy with Steve’s one-pricing fits all, has to love Steve for selling music videos, which reminds them that they’ve been giving MTV all of this for free. So, how is the music industry gonna like MTV any better than Apple?

  2. Doesn’t MTV just play the same rap video over and over and over, in between clips of the Real World and some spring break party somewhere? Seriously… if you’ve seen one rap video, you’ve seen all 100,000.

  3. Hey… if anyone out there wants to make a rap video (because we know there aren’t enough), let me know! All we need is a fish-eye lens and some bright lights, and maybe a hooker or two!

  4. Gee and I thought Rob the donut Glaser was preyed for sure. An MTV deal with Microsoft, that article reminds me of the old FUD days.

    I sense a certain irony. Remember when Steve Jobs got 150 million and assurances for Office development from Microscoft?

    I can just see it now.

    Bill Gates: I am pleased to announce that after giving away most of our stock to Apple they have promised us to develop iTunes for Windows over the next 5 years. They sure play for sure and we sure pay for sure.

  5. As most who have signed (under duress or desperation) Microsoft contracts before know all too well: Strike a deal with the devil and you’re likely to end up in the … doo-doo-doo-doo doo-doo-doo-doo … Twilight Zone!

  6. 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.”

    This is a great illustration of what I had said beofre. The problem with iPod competition is that they are not working inco concert to the benefit of them all. They work strictly to their own best interest, without regard to the group.

    This creastes an atmosphere whereby your “partner” could be negotiating a better deal with one of your competitors.

    I think, of all the iPod/iTMS competitors to come and go, MV may prove the best (as far as downloaded music goes). Their demographic is people that will WATCH TV to listen to music. MTV has a sweetheart deal with the music industry. The labels didn’t see the potential in MTV and practically gave the product away for free.

    MTV has the potential to leverage elements (free video) that Apple can’t get (not to the same extent anyway).

    Its still going to take a great deal of colloboration between MTV and MSFT to get the interface right, something neither of them know much about.

  7. <i>”Still, the network will have to do a better job than other music services to sell consumers on the upside of subscription services.”<i>

    There’s an upside? Who knew?

  8. URGE, by the way, is a horrible name and unlikely to help the cause.

    I have the urge to use the restroom. Bad connotation. I urge you to use our service. Too pushy/desperate. We all have our urges. Too primal.

    Write about URGE in your 2007 calendar, otherwise no-one will remember it.

  9. Hooray, multi-tiered pricing! ‘Cuz that’s what the consumer wants! They want to pay this much for this and that much for that and so much for the other thing! What a guaranteed success this will be!

    You go, MTV. Prove that Apple has taught you nothing. Just like all of Apple’s competitors. They stare at Apple glassy-eyed, wipe the drool off their chin, do the same crappy thing they’ve been doing all along, and wonder why it isn’t working.

    “Let’s make a player with an FM radio!”
    “Let’s start a competing music service that only sells WMA!”
    “Let’s charge a variety of different prices!”

    What’s that old saying? The definition of insanity is doing the same thing over and over and expecting different results? Apple’s competitors all belong in the looney bin.

  10. I believe it was Lewis Black who said: “MTv is to music what KFC is to chicken.”

    This is actually good news for Apple. No one who holds a job or uses more than .0001% of their brain watches MTv. This will put the last nail in the coffin of “leveraged brand” online music stores.

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