MTV Kills URGE, Joins Real on Rhapsody

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MTV Networks, RealNetworks and Verizon Wireless announced a joint venture Tuesday morning, which will unite the companies' digital music offerings with Real's Rhapsody service. MTV's URGE service will be shut down, but customers can migrate over to Rhapsody.

The expanded Rhapsody music service will fall under a separate corporate branding, called "Rhapsody America," jointly owned by MTV and Real. MTV will provide music programming from its MTV, VH1 and CMT properties, while Real continues to handle the underlying architecture and music sales.

Primarily a subscription service, Rhapsody offers all-you-can-download music for a monthly fee, as well as a la carte downloads. Songs can be transferred to portable devices that support Real's audio formats, such as those by SanDisk.

Michael Bloom, who ran URGE for MTV, will head the new company, which will have offices in New York, Seattle and San Francisco.

Verizon, meanwhile, will provide mobile-oriented services for Rhapsody, including delivering music from the service to cell phone users over the air. Rhapsody will be fully integrated with Verizon's VCAST service, although it's not clear if pricing for mobile downloads will differ than those on the PC.

In a largely expected move, MTV will cease operations of its URGE service that was launched with Microsoft, but largely ignored after the debut of the Zune player and Zune Marketplace. URGE customers can simply log into Rhapsody using their same username and password, and monthly billing will likely continue seamlessly from the new service.

The partnership could be a boon to Real, which has struggled to promote its subscription music service in the face of Apple's dominance with the iPod and iTunes. MTV is expected to devote considering marketing resources -- including television ads -- to promoting the joint service, including placement at MTV's Video Music Awards next month.

"Today's announcements represent a sea-change in the digital music market," stated RealNetworks CEO Rob Glaser. "We'll make Rhapsody the premier digital music service that delivers great music to millions of consumers whenever and wherever they want."

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