K-i-s-s-i-n-g [rquoter]MTV, RealNetworks Join to Battle iTunes By ETHAN SMITH and NICK WINGFIELD August 21, 2007; Page B5 In a bid to create a stronger competitor to Apple Inc.'s market-dominating iTunes Store, Viacom Inc.'s MTV Networks is set to announce today that it is merging its online digital-music offerings into a joint venture with RealNetworks Inc., the company behind the Rhapsody subscription digital-music service, according to people familiar with the matter. Verizon Wireless, a venture of Verizon Communications Inc. and Vodafone Group PLC, has signed on to supply mobile distribution for the joint venture's content, according to a person familiar with the matter. That could provide additional leverage against Apple, which angered many mobile carriers and consumers with the decision to make its iPhone compatible only with AT&T Inc. The move appears to spell the end of MTV's Urge digital service, launched in partnership with Microsoft Corp. last year. Microsoft has been heavily focused on its own Zune service in recent months, to the apparent detriment of Urge, which had few subscribers. MTV itself no longer invested significant resources in Urge after Zune's debut, according to a person familiar with Urge. Teaming up with MTV could give Rhapsody a broader reach, thanks to the music channel's strong marketing and vast reach in cable television and other media. MTV plans to promote the service heavily on its television channels. A person familiar with the matter said MTV and Seattle-based RealNetworks have been discussing a partnership for months and were eager to complete a deal before MTV's Video Music Awards ceremony on Sept. 9, during which they hope to promote the partnership. Spokesmen for MTV and RealNetworks declined to comment. The pairing is the latest effort by RealNetworks to raise the profile of Rhapsody, a service for which it charges users a monthly fee starting at $12.99 to listen to an unlimited number of songs. A person familiar with the matter said the venture is to be headed by Michael Bloom, who currently heads Urge for MTV Networks. MTV is to contribute editorial content, including music blogs. Mika Salmi, the president of MTV Networks' global digital media, is a former RealNetworks executive. MTV has been investing heavily in digital technology, including plans announced last week to invest at least $500 million in games, on top of acquisitions like that of Harmonix Music Systems Inc., the developer of the Guitar Hero game series.[/rquoter]
