Viacom's (NYSE: VIA) MTV unit is setting up a partnership with online music operator RealNetworks (NASDAQ: RNWK) to create an online music store to try to compete with the Apple (NASDAQ: AAPL) iTunes store. MTV's large marketing budget and substantial reach on cable TV will be the key to the effort.
Large wireless operators Verizon Wireless and Vodafone (NYSE: VOD), the largest carrier in Europe, will distribute the service. Apple has a music distribution deal with AT&T (NYSE: T) based on its exclusive sales arrangement for the iPhone.
While most competitors to the Apple music store and player powerhouse have done little, the new venture has a chance. Unlike projects like the Microsoft (NASDAQ: MSFT) Zune, Verizon and Vodafone has close to 150 million wireless customers between them. The would rival the number of iPods in the market. MTV's global brand as the top music video channel should also help.
However, these deals almost always fall apart because there are too many parties with different agendas. RealNetworks would like to boost its flagging Rhapsody online music store. MTV would like to find some success outside its cable distribution and the two wireless carriers would like to have a product to compete with the iPhone/iTunes juggernaut.
But, that is a lot of moving pieces with competing interests. Apple can sleep soundly tonight.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
8-21-2007 @ 8:11AM
John C. Randolph said...
This is a total non-story.
MTV's branding didn't help the "urge" network, which was their last much-touted online music store to be splattered on Apple's windshield. Real networks' "rhapsody" service has never been more than an embarassment. So what we have here is two failures in the online music sales game, and you call that a "challenge" to iTunes?
Get serious.
-jcr
8-21-2007 @ 8:21AM
FMarra7777 said...
You are right Doug, Apple can sleep well tonight! These companies want to dump a ton of money into something that is going to compete with iTunes
A.) That has hardly any profit.
B.) That is only one piece of a whole iPod ecosystem.
You have to have all the pieces of the puzzle to make it work. Even I understand that if you don't have all the parts on an airplane that it is never going to get off the ground.....
8-21-2007 @ 9:23AM
John C. Randolph said...
Correction! This isn't a new venture at all, it's MTV throwing in the towel on the Urge network, and merging the remnants with Real's "Rhapsody" service. See here:
http://macdailynews.com/index.php/weblog/comments/14643/
The real story is, "Urge" failed, even with Microsoft's money and MTV's brand behind it, and MTV is trying to spin this as a positive move.
-jcr
8-21-2007 @ 11:23AM
Brian said...
MTV should drop the 'Music' from their name. Their TV channel is the worst thing on TV. I would rather watch the home shopping network and be forced to buy things from it. This from a guy who was there to watch all the early rock and roll.
MTV is a BLIGHT on society and I would NEVER in a million years purchase anything from them.
Apple on the other hand created the current music scene, IMHO, with the iPod and the iTMS and all the other 'competitors' are just wannabe's. (Kind of like Microsoft is always copying Apple, so too is the music industry now.
Why would anyone buy online music from Wal-Mart? So they can abuse more of their 'employees'?