MTV, RealNetworks, Verizon to Peddle Music

The MTVs of today’s Internet-savvy youth are Facebook, YouTube and MySpace. MTV would like to change that.

In part, that’s why it’s joining with RealNetworks to form a new company, Rhapsody America, whose offering will be the exclusive digital music service for Real and for MTV Networks’ premier music and pop culture brands in the United States.

MTV’s existing digital music service, URGE, founded in 2006, will fold into the new offering. Starting today, URGE customers can use their existing usernames and passwords to log in to Rhapsody and enjoy access to both services.

On a conference call to announce the news, President of MTV Networks Music & Logo Group Van Toffler said it was too early to detail price points for the new service.

In addition to the forming of their joint venture, MTV and RealNetworks today also announced Rhapsody America’s long-term and exclusive relationship with Verizon Wireless, in which the companies will partner to bring consumers digital music to their PCs and mobile phones. Rhapsody will be fully integrated with Verizon’s VCAST Music service.

Financial terms of both deals were not disclosed.

“By bringing together the cultural and musical heritage of the MTV Networks family with the functionality of Rhapsody and the reach of V CAST Music, it’s like we’ve put the best lead singer, drummer and guitarist all on the same giant stage,” Toffler said in a statement.

Forrester research analyst Josh Bernoff told he isn’t so sure the combo is going to make for a hit. Especially since music buyers prefer the $.99 per song model of Apple’s iTunes Store over Rhapsody’s subscription-based service.

“It’s tough to get people interested in the idea that you download music and it stops working if you stop paying. It’s not really comfortable for most people,” Bernoff said.

Of course MTV and RealNetworks aren’t the only digital music vendors trying to unseat Apple from its perch.
On August 6, announced it contributed money to the completion of Series A financing for, a digital music store with a demand-based pricing system “propelled by social networking.” That investment follows a more direct build-out on Amazon’s own site, including plans to offer DRM-free MP3 format songs from more than 12,000 record labels, starting with EMI’s digital catalog. Just today, Wal-Mart announced the launch of “DRM- free” MP3 music downloads from its site as well.

MTV said on-air integration for the new service will begin next week and Rhapsody will also be integrated into the fabric of MTV’s marquee event, the Video Music Awards airing live from Las Vegas on September 9th.

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