CDnow Gets Its MTV

Music e-tailer CDnow
and MTV Networks announced they have entered into a three-year, $22.5 million cash and stock agreement aimed at integrating the companies’ content and products.

Terms of the alliance cover sponsorships of events, online and on-air advertising, online music merchandising, and the development of content and co-promotions online.

In addition, CDnow will exclusively sponsor the 1998 MTV Video Music
Awards, and plans to support other MTV and sister-station VH1 programs.

The CDnow integration into Viacom-owned MTV
and VH1 online sites is slated for a June launch. Access to 250,000 music
products will also be provided via custom-designed MTV and VH1 online
“stores” on CDnow’s site.

CDnow will also carry music reviews and news from MTV and VH1, and display a “Now Playing” ticker promoting the stations’ programming on TV. The companies said they will also implement co-promotions of some MTV and VH1 franchises.

“This alliance with MTV and VH1, the preeminent broadcast music brands,
affords CDnow the opportunity to take its integrated marketing strategy to the
next level,” said Jason Olim, CDnow CEO and President. “These are the only
brands that have the true horsepower to move consumers from their televisions
to their computers, and that’s what marketing convergence is all about.”

“We recognize CDnow as the leading online music retailer whose focus is building the best possible store for its customers,” said Matt Farber, Senior Vice President, Programming Enterprises, MTV and VH1. “In working with them in new and creative ways, we will both be serving our audiences better.”

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