Rhapsody/MTV/Verizon Wireless Update and First Take August 21, 2007Posted by David Card in Media.
Very little update on the concall.
– Real will be the majority owner of Rhapsody America. Viacom will have a substantial position in the joint venture, and there is an exclusive deal of some kind with Verizon Wireless.
– Urge’s head, Michael Bloom will run the jv. Urge will continue to exist as a service with Microsoft technology “for some time,” but negotiations on winding it down appear underway.
– Big marketing will start at the MTV Music Video Awards on Sept. 9. When asked directly about Urge’s marketing to-date, the response from Real and MTV was: the “firehose will open” on marketing for the first time.
Again, the potential’s all there. It’s my understanding that MTV never did turn on the marketing with Urge originally, so there may be real meat there. Exclusives are, I suppose, a necessity, but in theory all media wants to be distributed widely. If Verizon puts marketing muscle behind this, the exclusive might be worth it.
It’s all in the execution, but this commitment sounds very serious. It meets the required two of the three “laws of partnership” ie money is changing hands, and there are exclusives. Next, product must ship.
Of course, Apple’s still ruling digital music from an awareness and $$ perspective. Does this mean Apple needs a subscription service with OTA capabilities? No, not at all. Someday maybe, but right now, no matter how cool Rhapsody and Napster are, they appeal to a relatively limited audience. Marketing and platform expansion will open that up…but it won’t be an instant transformation. OTA will be a niche discovery/sampling experience for a while, too.