MTV, Real and Verizon join forces

Jonathan Arber
22 Aug 2007
00:00

Urge, the MTV-owned digital music service that failed to gain traction in the market, will be incorporated into Real's Rhapsody service, under the new name 'Rhapsody America'.The service will be available on PCs and on mobile phones due to an agreement with Verizon Wireless.

Jonathan Arber, senior analyst at Ovum, noted: "We have long expected to see some consolidation in the second tier of the digital music market - there are simply too many players competing for too small a slice of pie - and we wouldn't be surprised to see more deals of this type going forward.

"For MTV, this deal allows them to hand over the reins of what has been a disappointing service to a more experienced player (Rhapsody is thought to be the leading subscription-based player), while it gives Real the benefit of access to the MTV brand for marketing purposes.

Verizon perhaps stands to gain the most here - the injection of a key brand should help boost its music service, while the integration with the fixed service greatly increases its value proposition to consumers.

However, we very much doubt that this is a serious threat to iTunes - the subscription model has thus far proven unpopular with consumers, and there are no indicators that this new service will change that. In addition, the music offered by the service will not be playable on iPods, which is likely to severely limit its appeal at this time."

Jonathan Arber is an analyst with Ovum's consumer products group

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