Seattle – Viacom Inc.’s MTV Networks and digital-media company RealNetworks announced Tuesday a digital-music joint venture that will compete with Apple’s dominant trinity of the iTunes store, iPod player and iPhone.
MTV will merge its Urge music service into the Rhapsody offering from RealNetworks Inc., forming a new company called Rhapsody America. The new service will be accessible on computers and music players and integrated with Verizon Wireless’s VCast multimedia service for cellphones.
MTV will heavily market the Rhapsody America service starting in September and will provide music playlists and other programming.
The companies did not say how much the new service will cost.
Rhapsody currently charges subscribers $12.99 a month for unlimited listening and sells individual tracks for 99 cents, with a discount for subscribers.
Executives from the three companies said in a conference call that RealNetworks owns a majority of the new venture, though MTV’s stake is “substantial.” The relationship with Verizon Wireless, owned by Verizon Communications Inc. and Vodafone Group PLC of Britain, is exclusive and long term, the companies said.
Further financial details were not provided.
Michael Bloom, previously the general manager of Urge, will lead the new company. He said Urge’s existing customers will be migrated to Rhapsody America over time but would not give further details.
For now, Urge customers can use their accounts on Rhapsody and access both services.
So far, no other company has come close to rivaling Apple’s successful combination of music store and music player. Microsoft Corp. worked with MTV to build Urge into its Windows Media Player software, but after Urge launched last year the software maker shifted focus to its own Zune music player and store.
So far, the Zune has captured only a sliver of the digital-music market.
John Stratton, Verizon Wireless’ chief marketing officer, said in Tuesday’s conference call that phones with 8 gigabytes of storage – comparable to the biggest iPhone – would be available by the end of this year.
Stratton also said phones with 16 GB of storage should be ready by mid-2008, and he hinted that the service will include over-the-air downloads of songs straight to cellphones.
RealNetworks also began testing the sale of songs from Universal Music Group’s catalog without copy-protection restrictions Tuesday, joining several other retailers, including Wal-Mart Stores Inc.
That would allow such songs to play on the iPod. Rob Glaser, RealNetworks’ chief executive, said music free of such restrictions should go mainstream in 2008.
