Remember back in the day when MTV's marketing slogan was "I want my MTV"? Well, now it should be "I want my downloadable song from MTV!" Doesn't have the same catchy ring, does it? Agreed, yet the inelegant phrase amply describes the Viacom (NYSE: VIA) unit's new ambitions.
MTV will make the hookup with MusicNet (which is a joint venture composed of RealNetworks (Nasdaq: RNWK) and a trio of music companies -- Warner Music, BMG, and EMI) to create and brand a new online music-download operation. MusicNet already supplies its services to Time Warner's (NYSE: TWX) America Online users and will be assisting the Virgin Group in its attempt to buy some real estate in this growing arena. No specific start date has been announced, and pricing tiers have yet to be determined.
Ever since the infamous birth of the rogue, controversial peer-to-peer system Napster -- now legitimized and owned by Roxio (Nasdaq: ROXI) -- the idea of purchasing music over the electronic ether has been eminently inculcated into the consumptive ideology of today's discretionary-carrying youth. An incredibly dynamic market was created, bringing with it a cavalcade of powerful forces, each one intent on claiming the nascent space for its own. Wal-Mart (NYSE: WMT) is exploring this brave new world, proving just how strong a business opportunity it is, and how mainstream it will become (and how competitive, of course).
MTV will have to compete with Apple (Nasdaq: AAPL) and its army of iPod devices, and it might even have to contend with the Golden Arches itself, McDonald's (NYSE: MCD). Everyone is jumping on the bandwagon.
So, even though MTV has its work cut out for itself, my instinct tells me it is going to do well and eventually grab a ton of the mindshare available for this sector. Why? I've got one word for you (and, no, it isn't plastics): brand. The equity inherent in those three letters, coupled with the formidable relevance and resonance they hold with the technophile teens and collegiate dudes across this sphere of ours, makes me think that the cabler will be able to monetize the strong relationship with its hip viewers even further than it already does.
Mark Mahorney wrote about this sector just last week, and wondered about Roxio's future (as well as his own perspective on why downloading music might be valuable). This area is sure to grow, and my gut hunch is that either MTV or Wal-Mart will end up being the dominant players somewhere down the path. Anything can happen, though, as MTV is well aware, its audience can be quite fickle.
Will MTV really pose a threat to Apple's music-selling business? Share your thoughts on the Apple discussion board.
Fool contributor Steven Mallas owns none of the companies mentioned in this Take.
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