MTV, Microsoft URGE music service begins life with a severe handicap

“Apple Computer Inc.’s dominant iTunes music download service is about to get tough new competition today from a powerful pair of rivals — software titan Microsoft Corp. and music video broadcaster MTV Networks. The new service, called Urge, will charge buyers the same price as iTunes’ popular 99-cent song downloads. But Urge also will let users download to their personal computer and listen to any recording in its 2-million-song catalog for $9.95 a month. Users who pay $14.95 a month will be able to copy their songs onto portable music players and listen to them wherever they want, thanks to anticopying software from Microsoft that prevents music piracy,” Hiawatha Bray reports for The Boston Globe. “While many competitors such as Napster, Yahoo Inc., RealNetworks Inc.’s Rhapsody, and even Microsoft’s own MSN service have entered the online music business in recent years, all have failed to shake Apple’s grip on the market.”

“But Urge begins life with a severe handicap: Its music downloads won’t be playable on the Apple iPod, which has more than 70 percent of the market for portable music players, according to the market research firm NPD Group. Instead, they must be played on competing players such as the Zen line from [beleaguered] Creative Technology Ltd.,” Bray reports.

“Jason Hirschhorn, MTV Networks’ chief digital officer, a business unit of the entertainment conglomerate Viacom International Inc., admitted that Urge poses no immediate threat to Apple’s lead in Internet music. Indeed, Hirschhorn said that Urge was created to cement a strong Internet identity for MTV, not to compete against Apple or other Internet music services like Napster and Rhapsody. ”It’s not about beating Apple,” he said. ”It’s not about beating Rhapsody.” In fact, MTV has paired with Apple to sell some of its TV shows as downloads on the iTunes site, and Hirschhorn said he’d like to expand the MTV-Apple relationship,” Bray reports. “Urge is wholly owned by MTV Networks, with Microsoft acting as the developer of the underlying technology. But Microsoft clearly has a strong commitment to the venture. It has embedded the Urge software in the newest version of its Windows Media Player program, available as a free download for computers running Microsoft’s Windows XP operating system beginning today. The new media player is incompatible with computers that run Apple’s Macintosh operating system.”

Full article here.

MacDailyNews Take: URGE: Just 2/3rds of iTunes’ library in an iPod-incompatible format. It is simply not a threat to Apple’s dominance. Napster, Real, and whatever outfit is still struggling along on Apple’s table scraps should be seriously worried; MTV might end up getting most of Apple’s leftovers.

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Related articles:
EMI Music Chairman: Music subscription services like Napster and Rhapsody haven’t beeen huge – January 23, 2006
Study shows Apple iTunes Music Store pay-per-download model preferred over subscription service – April 11, 2005

MTV’s and Microsoft’s URGE should concern also-rans like Real, Napster and Sony – not Apple – May 15, 2006
MTV’s and Microsoft’s iPod-incompatible URGE online music outfit faces uphill battle – May 15, 2006
Oppenheimer downgrades RealNetworks based on Microsoft’s ‘URGE’ partnership with MTV – December 15, 2005
MTV-Microsoft URGE music service not targeting iPod, iTunes users; Real CEO PlayedForSure? – December 13, 2005
MTV and Microsoft team up for new digital music service ‘URGE’ – December 13, 2005

25 Comments

  1. Microsoft always claims that they promote choice. Therefore, they offer multiple stores in WMP. But they are also pushing for subscriptions. Do they expect that you will pay a monthly fee to all of them? Or do they expect that you will still be limited to the one you initially ‘chose’ and are then locked in to. Seems lik they talk out of both sides of their mouth.

  2. Less selection, no exclusive content, for the same 99¢.. Why bother? Oh, but you can rent music for $15/mo! I forgot how well that model was working out for Napster, Real, and others! *snicker*

  3. What I would look for next is some sort of way for MS to lock out iTunes from Windows. They will call it an accident just like they did when Quicktime ‘became’ incompatible a few years ago.

    If anyone remembers the phrase “knife the baby”, you know what I’m referring to.

  4. Just 2/3rds of iTunes’ library in an iPod-incompatible format.

    I’d like to see Apple dump the duplicates in its iTMS library. The user has that ability within iTunes.

    I’d venture that if Apple did eliminate the duplicates, they’d remove about 300,000 titles. After that, claims on the size of the iTMS library would be far more accurate.

  5. I have to say, one thing that I don’t seem people acknowledging at all is NOT that URGE won’t support the iPod; but that it doesn’t support the Mac OS at all. Obviously, the iPod is a pretty big deal, but I really would think that the days of placing Mac users marginal should be over. Apple users just spend more money on digital media, it maybe a smaller crowd but is more lucrative and influential. Most successful internet media ventures in this day and age have gained ground by being Mac accessible.

  6. From the MTV glossary:

    Re-urgitate: To listen to a song on the Urge service a second time.

    And no, as far as media content producers are concerned, the Mac platform is still a fourth-class citizen in a third-world country using second-rate tools. They just won’t bother to create music download services, video download services, and interactive media for the “tiny percentage” of us Mac users.

    But I do believe the tide is turning. Why, my recent AT&T/SBC DSL install CD actually came with a Mac OS X installation kit right on the hybrid CD! I think as Apple continues its surge we’ll see more of this.

  7. As much as I want to see another “Microsoft controls more of the computer world” initiative fail, I wouldn’t dismiss it so readily.

    Like Internet Explorer, this service is going to be included with future Windows so it’s already there, giving MS and Urge (MTV) an immediate advantage (unlike the other MS-backed music services).

    We all saw what happened to Netscape after MS’s anti-competitve, monopolistic practices (integrating Explorer into the OS) … Apple cannot rest on it’s laurels and, even given iTunes/iPod present lead, we shouldn’t take MS and it’s obsessive quest for global domination for granted.

    (As I opined in another thread (Creative lawsuit against Apple), I wouldn’t doubt MS is behind the timing of the suit (same time as the WMP 11 & Urge intro) and could even help finance it given Creative’s financial situation and future court costs.)

    note in sfgate article…
    http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2006/05/15/BUG0VIR4AE1.DTL&type=business

    MS specifically teaming with and helping mp3 player manufacturers (Samsung, Creative, etc) create an easy, all-in-one solution (aka iPod/iTunes experience)

    It’s good to be confident but it also pays to be a bit paranoid and watchful, especially given MS’s history.

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