MTV adds heft in Rhapsody link-up

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MTV Networks said it is merging its year-old Urge downloadable music service into Rhapsody, the subscription service owned by RealNetworks. The new service will be called Rhapsody America, and will get a huge marketing boost thanks to a planned high-profile presence during the high-profile MTV Video Music Awards, which will air early next month.

The announcement this week amounts to an acknowledgement that MTV's current strategy of going it alone in the music download space had failed to connect with e-commerce consumers. This, even though Urge was being bundled with Microsoft's Windows Media Player, which is available on most every PC produced today.

The third player in MTV's new offering is Verizon Wireless, which will become the mobile platform for Rhapsody through its VCAST   service. Verizon will market Rhapsody through its network of Verizon Wireless Communications Stores. On-air integration for the service will begin this week.

Rob Glaser, chairman and CEO   of RealNetworks, said in a statement, "[This] represents a sea-change in the digital music market. By partnering with MTV Networks, one of the most storied brands in music history, and the market's leading wireless company, Verizon Wireless, we'll make Rhapsody the premier digital music service that delivers great music to millions of consumers whenever and wherever they want."

As of last week, Urge customers were able to use their existing log-ins for the service.

No one at MTV or RealNetworks was available for comment.

Like others in the music download space, MTV quickly found that even its own strong brand wasn't enough to compete with Apple's popular iPod and iTunes service.

"It's something that no one could plan for, but essentially the iPod has moved from beyond being a product and into the realm of cultural phenomenon," noted Yankee Group director of digital entertainment Michael Goodman. "When that transformation occurs, it becomes very hard to displace."

Goodman added that MTV did not help itself during its release of the Urge service by not aggressively marketing the service - especially missing natural cross-promotion on its MTV and VH1 television channels. The decision to not make Urge downloads iPod compatible also hurt.

"There was a lot of potential there with [the Microsoft partnership], but that potential was never realized," Goodman added. "So a lot depends on what they do with this new deal. If it's just a æpress release' partnership, it's meaningless."

While Rhapsody America downloads are still lacking iPod compatiblity, this new venture may well have several things going for it. Foremost will be the fact that the service will be available not only as a bundle on PCs, but also on cell phones and other mobile devices, thanks to the exclusive deal with Verizon Wireless.

"[Again,] a lot depends on what they do with it," Goodman pointed out. "There remains a lot of potential there with Real but you still have to execute."

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