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Tuesday, Aug. 21, 2007 at 12:41 pm

MTV Partners With Real to Chase iTunes. Is Yahoo next?

By Robert Gorell
August 21st, 2007

That's the way to do it...The Wall Street Journal reports that MTV will announce a partnership with RealNetworks (RNWK) to compete with iTunes. Also to be announced, Verizon (VZ) will offer mobile distribution for the MTV/Real venture. Furthermore, the Journal speculates that MTV will get rid of Urge, the subscription-based music service they developed with Microsoft (MSFT).

[...] Microsoft has been heavily focused on its own Zune service in recent months, to the apparent detriment of Urge, which had few subscribers. MTV itself no longer invested significant resources in Urge after Zune’s debut [...]

Perhaps, but could this leave room for Yahoo to swoop in? I’ll explain in a moment. But first, the back story…

In the end, if that’s what this is, Urge never really had a chance. Microsoft never had much to offer MTV — unless you’re one of three 16 year-olds named Kristen, who are, like, on their way to Starbucks to wirelessly “share” (read: get limited access to) the new Avril Lavigne album on their Zunes. Is it any surprise that MTV stopped investing in Urge? Why throw more money down the Zune hole? That’s why dropping Microsoft makes perfect sense.

Getting rid of the Urge business model (“get music from people who get music”) and its staff, on the other hand, would be throwing the baby out with the bathwater. Unlike RealNetwork’s subscription-based Rhapsody service, Urge is (was?) focused on hiring some of the top writers in the music biz to compile fresh, genre-specific playlists for subscribers. Urge fancies (fancied?) itself as the new version of the local record store, where the guy behind the counter always knew what to recommend. Rhapsody, meanwhile, relies on content from AMG (allmusic.com) — which ultimately serves as high-quality filler for a lackluster customer experience.

Now, here’s how Yahoo could help them win: Yesterday, Yahoo announced the ability to sample music files with Yahoo! Audio Search. Combine that search functionality with custom content and playlists from the (former?) Urge team and all of the and Rhapsody/AMG content teams and you’ve got something close to a one-stop-shop, subscription-based iTunes competitor. That would also be enough to make #2 music site Emusic.com sweat. MTV may be the biggest youth market brand, but Yahoo still has the largest audience online. Besides, striking a deal with MTV/Real would be a lot cheaper than buying Facebook!

Regardless of how this shakes out, kudos to MTV for side-stepping Microsoft. This is also great news for Rhapsody, as they go from umbilical cord to power chord.

UPDATE: Reuters reports that Wal-Mart will now sell DRM-free downloads for $0.94 — that’s $0.25 cheaper per song than iTunes.

DOUBLE-UPDATE: MTV, RealNetworks and Verizon Wireless have officially announced Rhapsody America, a multi-channel network that will pool resources from MTV’s Urge, Real’s Rhapsody, and Verizon’s V CAST music service.

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Comments (8)

  1. [...] info here: Financial Times, paidContent.org, WebProNews, InfoWorld, Mashable! and Future Now’s GrokDotCom — Related Posts [...]

  2. Great info, enjoyed catching up on all the latest buzz. Gonna be an interesting fight to see who is the winner this holiday season.

  3. Hi Robert — I work for Rhapsody, running PR for the service, and am part of the team that originally launched the service in 2001.

    I saw this week’s post about the URGE/Rhapsody news, and wanted to respectfully tell you that you’ve got it wrong when you say that Rhapsody’s editorial comes solely from AMG.

    While we do use AMG (primarily for metadata for albums and artists), the actual editorial recommendations and descriptions are provided by an in-house team of writers. Over the past six years, this team has written over 21,000 reviews for individual albums available through Rhapsody, and penned bios for over 19,000 artists whose music is available through the service.

    Rhapsody also provides, through our relationship with Rolling Stone publishers Wenner Media, four decades of album reviews from Rolling Stone magazine, spanning 13,000 reviews from such admired critics as Lester Bangs, Dave Marsh and David Fricke.

    In addition, Rhapsody offers some 40 years of mini-album reviews from Robert Christgau, one of the people who invented rock criticism as we know it today and a writer so eminent he’s only half-jokingly referred to as the Dean of American Rock Critics. Rhapsody users have access to over 8,000 of Chrisgau’s reviews.

    Anyway, I just wanted to reach out and clarify the point. You’re right that URGE has done a lot to bring in esteemed outside writers to provide a richer editorial experience through the service. But we haven’t exactly been twiddling our thumbs at Rhapsody, either.

  4. Also, the URGE and Rhapsody editorial teams have been merged. So you’ll continue to see great writing from passionate fans through Rhapsody.

  5. Matt,

    Thanks for writing in to set the record straight about Rhapsody.

    Congratulations on the deal. It looks like a great opportunity to reintroduce the service and to expand it into brand new territory.

  6. I just noticed that both Rhapsody and RealPlayer have switched from Gracenote media recognition to a competing service from AMG. This must be a real problem for the Gracenote because Rhapsody and RealPlayer were two of the company formerly known as CDDB’s largest customers in terms of global users.

  7. This was on the Valleywag website -

    Real dumps Gracenote music service

    Gracenote runs the service that automatically fills in song names, musicians, and album names when you rip a CD to your PC’s hard drive. Without it, we’d be stuck spending years entering CD track data manually. But the company is no longer without competition — and it just lost a big client to a rival. Gracenote has been discreetly dropped by RealNetworks. A tipster alerts us that RealPlayer and Rhaposdy are now using All Media Guide’s identification service, Lasso. Real joins a growing list of AMG adopters, including Sony and Apple. It’s no surprise that the music services, facing thin margins, are shopping around.

    http://valleywag.com/tech/digital-music/real-dumps-gracenote-music-service-301216.php

  8. Jocelyn & John,

    Thanks for the updates!

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