MTV Wakes Up to Online Music

MTV, which sat on the sidelines while Apple, Napster and MusicMatch rushed into the online music market, has finally decided to get off the bench and enter the game.

The Viacom-owned company said it will launch its own online music download service to compete with a list of players that seems to grow almost daily.

The announcement was made at the Harris Nesbitt Gerard Playtime conference in New York by MTV chairman and CEO Tom Freston, who reportedly provided few details about the service.

Great Brand

While entering the market late and facing serious entrenched competition, some analysts believe the entertainment company still will be able to leverage its global brand into a significant share of the market.

“They have a great brand name and an excellent springboard from which to promote an online music business,” Jarad Carleton, an IT analyst with Frost & Sullivan, told TechNewsWorld. “It’s clear that the online music business is going to be highly competitive, but I’m of the opinion that MTV has the ability to be one of the larger online music providers because of its well-known brand name and a large captive viewing audience.”

MTV is getting into the market later than other companies that have announced music services, said Carleton, but if the company promotes its service heavily, it could have a big advantage over other, purely Internet-based companies.

“The ability of MTV to sell products and music to teens and young adults is proven,” said Carleton. “So if their marketing people push the MTV online music store on the channel, they should be able to turn this into a profitable business for MTV and for the record companies as well.”

Needs PC Alliance

In delaying its entrance into the pay-per-tune business, the company will miss the advantages that accrue to the first movers in a market, noted Inside Digital Media senior analyst Philip Leigh. “Their brand is their strongest asset, and what they have got to try and do is target everyone that comes to their Web site,” he told TechNewsWorld.

While MTV may be able to survive missing the opportunity to be a first mover, it cannot afford to miss future chances to distribute its own brand of online music, Leigh added. “Between now and the time MTV launches its service, you’re going to see computer manufacturers starting to offer services, just as Dell and MusicMatch are doing,” he said. “If MTV misses that window, then they’ll be missing a big distribution opportunity.”

Leigh contended that success in the online music market will boil down to two things: ease of use and distribution. “A lot of people are going to announce [new services], and lots of them are going to stumble by offering services that just don’t work very well,” he said.

Validates Market

Part of winning the distribution wars will be brand, Leigh observed, but the other part will involve convincing a major PC manufacturer to adopt a particular service.

MTV’s brand not only will help it sell online music, but also will further validate the market, according to MusicMatch senior vice president for business development Bob Ohlweiler. “This is a validation that the Internet is the way people are going to be buying music in the future,” he told TechNewsWorld. “If players like MTV weren’t ultimately involved, I would be surprised.”

While the market might appear to be getting crowded, Ohlweiler asserted there is still plenty of room for additional players. “The prerecorded music business is a $36 billion industry,” he said. “If you add up all the players today, we’re probably doing a couple of million dollars in downloads a month, so we haven’t even begun to scratch the surface yet on the transformation of the way that music is distributed.”

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