|Jason Hirschhorn, MTVâ€™s global chief digital officer, says MTV will incorporate marketing messages about its music service throughout the programming of its various TV channels and events.
Urge, the MTV-Microsoft digital music collaboration unveiled earlier this week, will launch in early 2006 and include a subscription service with 2 million songs as well as an a la carte purchasing model.
Haven't dented iTunes
Subscription-based digital music stores -- such as Napster, Yahoo or Rhapsody -- are generally regarded as a great value for consumers who for as little as $5 a month have access to a virtually unlimited music library. But the players in the space havenâ€™t made a significant dent in iTunesâ€™ a la carte market share, which hovers around 70%, mostly because consumers are used to owning music rather than renting it.
Mr. Hirschhorn believes thereâ€™s still a large untapped market for digital music because most of the marketing thatâ€™s been done around the subscription services â€śhasnâ€™t been focused as an entertainment experience but as a technology experience.â€ť
Subscription services are generally regarded as offering higher profitability than a la carte services, such as iTunes, and are often preferred by record companies because they promise recurring revenue. Once a users stops subscribing to a digital music service, they lose access to any music they may have downloaded from the service. Additionally, users who fall into a younger demographic -- including MTVâ€™s core 12-to-34 audience -- are more accepting of a subscription-based service, leading analysts to believe it might indeed succeed in being a powerhouse digital music player.
MTV's 'right demo'
â€śMTV has a huge audience, and theyâ€™ll be able to convey the merits of such a service repeatedly to a large number of people who are in the right demo,â€ť said Phil Leigh, president of Inside Digital Media. Mr. Leigh, however, doesnâ€™t believe MTV will change the proposition significantly. â€śThey may put a different spin on how they tell the story but the value proposition is the unlimited jukebox in the sky.â€ť
MTV Networks will market the service contextually -- letting consumers know when a video they watched can be downloaded or if the soundtrack to one of its shows will be available on Urge. The service will eventually be video-based, and MTV Networks is open to distributing content from other TV networks on Urge.
MTVâ€™s play isnâ€™t necessarily going after iTunes, which with its video offerings has begun to infringe on MTV territory, Mr. Hirschhorn said, but it will provide an Apple alternative. MTV and Microsoft will â€śhelp nurture a couple [portable electronics] partners so that thereâ€™s a viable alternative on the device front,â€ť he said. â€śBecause Apple doesnâ€™t want to work with other people.â€ť