MTV, Microsoft take on Apple's iTunes

MTV Networks and Microsoft are joining forces to develop an online music service dubbed URGE, set to launch early next year which will compete with Apple's iTunes Music Store. Microsoft will integrate the new service into the next iteration of its Windows Media Player software--which comes bundled with Microsoft Windows--leveraging its dominance in the operating system market to push the music service into homes and businesses around the world. The service will offer over two million tracks, available individually or as part of a subscription package, and will feature music over online radio. Pricing was unavailable, but Jason Hirschhorn, MTV's chief digital officer said users can expect to pay different tiers for individual downloads, subscriptions, and moving rented tracks to a portable music player, according to the Associated Press. Apple's iPod currently reigns over the digital music market with about 75 percent market share.

URGE will not be compatible with Apple's Macintosh computers, or its reigning iPod digital music player. This will be a challenge the MTV Networks service will have to overcome, according to Michael Gartenberg, vice president and research director for Jupiter Research.

"The biggest paradox is the people who are most likely interested in an MTV-branded music experience are also probably the demographic that has the highest interest in the iPod," Gartenberg said.

The MTV brand could help spark interest in non-iPod players, but Hirschhorn said URGE's focus will not be iPod users.

"We think the iPod has done a great job. Our aim is not to switch people from iTunes and the iPod," Hirschhorn said. "We need to concentrate on where there's going to be a bigger market."

Both companies understand the rough road ahead, as so far no online music subscription service has come close to rivaling Apple's dominance. Both parties likely also know that the iTunes Music Store exploded not simply because it was a superior service, but also because Apple has produced integrated content that works seamlessly with the iPod.

"At the end of the day, the iPod drives sales to the iTunes Music Store," Gartenberg said. "It didn't happen the other way around."

Filed under: industry
Other story tags: digital music/video