As an amendment to my previous mention of the MTV-RealNetworks mobile music service joint venture, here's some information (via paidContent) on the deal. RealNetworks filed a Form 8-K that contains some specifics on the financial side of the venture. This looks like a marriage of necessity for RealNetworks (which needs to expand Rhapsody's mobile subscriber base and needs a big checkbook) and one of very few options for MTV (URGE has faltered, and mobile subscription has got to be a big strategy for the Viacom-owned company).

The joint venture is a limited liability company agreement. MTV will contribute a five-year, $230 million note, and RealNetworks will be obligated to buy $230 million in advertising on MTV cable channels -- which will include integrated marketing -- over five years. Real will control 51% and MTV will control 49%. Neither can transfer their interests for five years, and MTV gets a right of first refusal if Real decides to sell its interest. Expectations for 2007 revenue are between $2.5 and $3.5 million.

Here are some sections of the filing.

• "The assets contributed by Real generally consist of its Rhapsody service subscribers, a cash contribution, certain employees, contracts, revenue from existing Rhapsody subscribers, marketing materials, player hardware, rhapsody.com and related URLs, and distribution arrangements."
• "Real will also license certain assets to Rhapsody America, including Rhapsody content, the Rhapsody brands and related materials."
• MTVN will contribute cash, a five-year note for $230 million and other assets, including its existing URGE subscribers and marketing materials.
• "MTVN will also license certain assets to Rhapsody America, including URGE content, brands and related materials."
• "Real expects the formation of Rhapsody America to generate incremental revenue of approximately $0.5 million for the third quarter of 2007 and approximately $2 to $3 million for the remainder of 2007."

Posted by Glenn at 3:12 PM | Link
|Mobile Music||RealNetworks||URGE|

• RealNetworks, MTV and Verizon are teaming up for a mobile music service called Rhapsody America. MTV's URGE music service will join with RealNetworks' Rhapsody subscription service to create a music service that can be accessed via PC, mobile phone or (compatible) portable media device. Verizon's V CAST will be the service's mobile platform. (Press release)

• Wal-Mart has announced the launch of $0.94 MP3 downloads and $9.22 MP3 album downloads. The catalogs of EMI and Universal Music Group are available in the MP3 format at 256 kbps. The original, 128 kbps WMA tracks will also be available. The first things I noticed at the music download page were links to $3.88 MP3 albums (which are all EP's and singles), $5.88 MP3 albums (catalog titles like Bon Jovi's Slippery When Wet) and $7.88 MP3 albums (Norah Jones' Come Away With Me, for example). Unfortunately, Wal-Mart's updated digital store does not support Firefox. (Press release)

• Solange Knowles, sister of Beyonce, has signed a worldwide co-publishing deal with EMI Music Publishing. Knowles is currently promoting Baby Jamz, a hip hop-oriented toy line created by Planet Toys and Music World Entertainment, her father's company. (Press release)

• Another Madonna-to-LiveNation? article, but this one has some numbers and word of a rival. "One source estimated the value of the Live Nation offer to be $180 million, with the touring giant potentially licensing the recording rights for roughly $30 million. ... It is doubtful that WMG, the only label Madonna has ever been signed to, would give up the Material Girl without a fight. Sources say that the company has made a counter-offer to Madonna that also includes a touring component that could be helmed by rival promoter AEG Live." (Billboard.biz)

• Said the CFO of Emmis Comminications about satellite radio, "The people that utilize satellite radio often toggle between AM and FM and satellite radio, and it really hasn’t caused a measurable effect in our business yet. ... Satellite radio is a niche business focused on people willing to spend 13 dollars per month for the radio. Which for long-haul truckers or people who are advocates of a music format which may not reach a mass market – if you’re a passionate Blue Grass listener in New York City – it probably makes sense for you. But I think they’re still challenged. It’s a challenging business model to launch a billion-dollar asset in space and try to build up a mass-market audience quickly. And with 15 million subs it’s tough, which is why they’re trying to get the merger done. In large measure they’re trying to work with the government to solve a business model problem." (Radio Ink)

• Verve Music Group has named Mitchell Cohen as its VP of A&R. Cohen was previously SVP or A&R at Columbia Records. (Billboard.biz)

Posted by Glenn at 11:37 AM | Link
|Mobile Music||Publishing||Radio||RealNetworks||Rhapsody||URGE||Wal Mart|

It's well known that the iPod and iTunes dominate digital music. There are a slew of hopefuls in both music store and hardware. For all the work they put in, not much of Apple's lead has been chipped away. What little market share the runners up have is splintered. The more patient and cash-heavy company will emerge as the runaway number two and, maybe one day, be in a position to challenge Apple's leader position. Two such companies are Microsoft and MTV.

Microsoft's Zune has its critics, but some of them freely point out that Microsoft's long-term strategy for the Xbox allowed the product to match and overtake Sony's PS3. (Matt Rosoff has a good Zune strategy overview at his Digital Noise blog at CNET.) I see the same kind of patience in Microsoft's Zune marketing and roll-out. What we've seen so far has been a purposeful launch with a lot of lifestyle marketing. The Zune team is taking it one day at a time and will tweak and augment the product over time. Zune's share of the hard-disk segment stood just over 9% in April of 2007.

If there was ever any doubt about Microsoft's level of commitment to Zune, that was answered with the (almost certainly costly) Zune Live at the BBQ, a hip hop concert and BBQ at the Empire-Fulton Ferry State Park in Brooklyn, New York. Last weekend's concert, which was preceded by similar events in Chicago and Los Angeles, offered performances by LL Cool J, Clipse, Brand Nubian and others at a scenic setting between the Manhattan and Brooklyn bridges. (Read show review at Blender.)

MTV's URGE, a decent but unherladed online music store/service, is doing a bit of lifestyle marketing itself. I attended one of the URGE Nights concerts a few weeks ago, Pelican and Earth, at the Bowery Ballroom in New York City. The URGE Nights concert series is curated by URGE programmers and editors that ties in artist playlists and some exclusive content at the URGE store. URGE is not a very popular service, though. Back in December, URGE had a 3.8% installation rate even though it is integrated into Windows Media Player.

Other than the URGE posters on the walls, I don't recall seeing or hearing an URGE presence at the concert. Posters on a venue's walls is nothing more than going through the on-site marketing motions. There's little else to bring home the message.

Visibility is important to lifestyle brands, and neither URGE nor Zune have much of it. During my summer in New York, I have done an experiment and searched for other Zune users. On trains and subway platforms, at crowded public areas and in music venues, I have searched for a wireless signal from other Zune devices.

Over one million Zunes have been sold. There are eight million people in New York City. Just about everybody walks around carrying some type of gadget. One would figure a Zune sighting would be frequent events, right? Wrong.

Maybe searching for a signal wasn't the best way to search for a Zune. For the sake of battery life, I regularly leave the wireless off. My backup plan, therefore, was to spy what people carried. While on the subway and while walking around town, I tried to see which portable media player people carried. I did not see a single Zune. Maybe Zune owners are shy, I thought, as opposed to the conspicuous consumption exhibited by iPod owners. For a few weeks I carried my Zune around in my hand, out in the open, as if to coax out the other Zunes out into the open. Again, nothing. Eventually I ran across one Zune, held by a thirtysomething man on the D train leaving Coney Island, Brooklyn. He was showing a video to a friend.

After weeks of searching, I did finally found a Zune signal...at the Zune BBQ of all places.

Posted by Glenn at 1:23 PM | Link
|URGE||Zune|

• Data from Telephia suggests growth of ringtone sales may be flattening -- at least temporarily. Third quarter ringtone sales ammounted to $198 million, only $5 million more than the second quarter. (Read post at Digital Music News)

• Jupiter Research's Mark Mulligan says HMV, which struggled in the fourth quarter, needs to be more a media retailer than a music retailer. The retailer has dedicated more shelf space to non-music items, launched its own digital download site and, it is rumored, will launch in-store download kiosks. (Read article at BusinessWeek.com)

• URGE makes a move to differentiate itself by signing exclusive deals with dance labels Ed Banger and Planet E. The MTV online music service will make available unreleased tracks by the label. In addition, URGE is sponsoring a DJ set by Planet E founder Carl Craig. (Read artcicle at Billboard.biz)

Posted by Glenn at 2:22 PM | Link
|Brick-And-Mortor Retail||Mobile Music||Online Stores/Services||URGE|

Coolfer is spending a bit more time with MTV's new URGE music store and subscription service. Earlier in the week Coolfer raved about the combination of store and exclusive content. Some of that content is written by bloggers for URGE's Informer blogs. (Great idea, but the names given to them -- The Jazz Informer, The Pop Informer, The Latin Informer -- are incredibly bland. Where's the personality?)

Former Village Voice music editor Chuck Eddy wasn't out of sight for long. He's blogging the Metal Informer blog. Rock critic Jessica Hopper, whose name you may know from the Steven Merritt non-controversy, is blogging the Alternative Informer. She blogs at Tiny Lucky Genius. Cheryl Botchick, music journalist, is writing the Rock Insider.

Matthew Perpetua, known to most as the person behind popular MP3 blog Fluxblog, writes the Pop Informer blog at URGE. Daniel Felsenfeld, a composer and journalist who blogs at Felsenmusick, writes the Classical Informer.

If you're wondering how these writers find the time to blog for MTV, it's because they post once a week or so. Such infrequency, to be honest, is in contrast to the very frequency that blogs enabl and blog readers tend to demand from bloggers.

(Update: The infrequent blog posts at URGE will become much more frequent when the site is out of beta, Coolfer has been told by one of the bloggers.)

Posted by Glenn at 2:13 PM | Link
|URGE|