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WHY MTV’S DIGITAL CHIEF THINKS NAPSTER GOT IT WRONG

And Why Jason Hirschhorn Thinks His Music Subscription Service Will Work

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NEW YORK (AdAge.com) -- Jason Hirschhorn, MTV’s global chief digital officer, is confident MTV Networks will create a significant market for “renting” music by succeeding with Urge where other subscription digital music services have failed: in marketing the message to the consumer.
Photo: AP
Jason Hirschhorn, MTV’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.

Listen to Mr. Hirschhorn interviewed by Ad Age's Abbey Klaassen:

audio bug >How MTV's new Urge music service plans to compete against iTunes.

audio bug >MTV's marketing strategy for Urge: Integration across all TV channels.

audio bug >Where did the "Urge" name come from?

audio bug >Why does Urge see such potential in a subscription sales model?

audio bug >What demographic is Urge's subscription service primarily targeted at?


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 haven’t made a significant dent in iTunes’ a la carte market share, which hovers around 70%, mostly because consumers are used to owning music rather than renting it.

Mr. Hirschhorn believes there’s still a large untapped market for digital music because most of the marketing that’s been done around the subscription services “hasn’t been focused as an entertainment experience but as a technology experience.”

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 MTV’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'
“MTV has a huge audience, and they’ll be able to convey the merits of such a service repeatedly to a large number of people who are in the right demo,” said Phil Leigh, president of Inside Digital Media. Mr. Leigh, however, doesn’t believe MTV will change the proposition significantly. “They may put a different spin on how they tell the story but the value proposition is the unlimited jukebox in the sky.”

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.

MTV’s play isn’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 “help nurture a couple [portable electronics] partners so that there’s a viable alternative on the device front,” he said. “Because Apple doesn’t want to work with other people.”

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