MTV moves into Web music
MTV has struck a deal with the five major record labels – EMI, Warner Music, Sony, BMG and Universal – to offer an online music-download service, the announcement follows MusicNet’s launch of a similar service.
EMI meanwhile has struck a deal with HitHive that will permit the latter company to distribute digital music from EMI’s collection to some wireless devices.
MTV will begin to offer paid music downloads later this month in conjunction with the launch of its MTVi Internet radio station. Nick Butterworth, president and CEO of MTVi, said: “Our goal is to make all the music on our channels accessible online in a format that’s secure so that the artists can be compensated.” Single tracks will cost between 99 cents and $2.49, with album prices starting at $10.
The tracks, in MP3 format, will carry built-in copy-protection to protect against piracy. There will be limits to what can be done to song files – for example, it may be possible to burn a track to a CD only twice. MTV will host 8,000 tracks initially.
This pay per track/album business model is unlike that proposed by MusicNet. MusicNet expects music fans to pay a regular – so far undisclosed – subscription fee, and its service will launch in Nortth America only.
EMI and Seattle-based HitHive will begin testing the service on a limited basis. Users will be able to download and share some digital-music files using a patent-pending technology by HitHive, called Loan and Borrow, EMI spokesman Richard O’Brien said. He declined to disclose any financial terms of the agreement.
This system controls sharing of copyrighted material by letting users download EMI-copyrighted music from the HitHive Web site or from another user. Music can be listened to on a Mac, PC or wireless device for a limited number of plays, EMI and HitHive said.
EMI is also working on launching its own subscription-based digital music service, which is “about ready for a European rollout”, said Fergal Gara, the director of new media for EMI UK.
Gara added: “I think peer-to-peer has good marketing and promotional benefits. The challenge for all of us is to figure out at what stage do consumers put a value on digital services? EMI is a company with interests in over 50 new-media companies, but we haven’t received the hype that MP3.com and Napster have received. There is a movement in the music industry away from product and towards services, but our biggest slowdown in the rollout of our subscription-based digital-music service has been a lack of interest by our distributors.”