The URGE to Compete

December 19, 2005

Entertainment, Technology

Last week, Microsoft and MTV made a BIG announcement. They announced that they would annouce something at CES in January. Apart from the “buzz-centric” nature of announcing a future announcement, this announcement perked my ears up. Starting next year, MTV will be offering an online music service to challenge the iTunes Music Store. And that music service will be based upon Microsoft technology.

While details of the service will be revealed in a couple of weeks, what is clear is that the content distributors are starting to become uneasy with Apple – especially regarding its single-tier pricing model. We’ve already seen contentt sources like Rhapsody emerge – although to somewhat mixed (i.e., lousy) results. And the wireless carriers (like Sprint) are trying to get in on Apple’s business. Now the content owners and distributors themsleves are starting to move. MTV (Viacom) is a solid brand in the music industry. So the establishment of an online music store by a content developer/distributor means real competition for Apple.

Of course, the competitiveness of that offering depends on a lot of things. First, any music store must have either broad or exclusive content. The URGE service may have both. First, over 2 million songs will be available on URGE – from the very start. Second, unique content from MTV will only be available on URGE. These two factors may give URGE a chance.

And the fact that this content will be available on any digital music device (that isn’t from Apple) means that the device manufacturers will want URGE to succeed. Indeed, I expect that many of these devices will begin to bundle URGE. By bundling device and music service, there may actually be a chance for some real iPod/iTunes competition. Wow, woudln’t that be nice.

[Note: I have a 60GB iPod Photo with over 3,500 songs on it. I love it. But I can’t wait to see competition transform this market.]




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