Microsoft Wants Its MTV

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An earlier version of this article incorrectly mentioned that Microsoft had launched a subscription music service. We apologize for the error.

Is the competitive landscape of digital music services ready for another paired entry? Microsoft (Nasdaq: MSFT) and Viacom's (NYSE: VIA) MTV will be joining forces to launch URGE next year.

Based on Microsoft's media playing software -- and integrated into the forthcoming version -- it would be easy to dismiss the partnership as yet another entry into the already crowded digital music subscription space.

Companies like RealNetworks (Nasdaq: RNWK) and Napster (Nasdaq: NAPS) have established services that continue to gain traction every passing quarter. Yahoo! (Nasdaq: YHOO) crashed the party when it launched an unlimited music service that offers many of the features of Napster and RealNetworks' Rhapsody at a discounted price. Hovering well above these ambitious ventures is Apple Computer (Nasdaq: AAPL), leading the pack in piecemeal sales and having sold more than 600 million songs through its iTunes store.

Microsoft launched a music download service, but it was too "me-too" in a busy niche that begged for differentiation of some kind.

That's where Viacom comes in. The media conglomerate owns MTV, VH1, and CMT. That will give URGE a built-in global audience of music fans to target. Just as importantly, those music networks will provide URGE with a ton of proprietary content that it can serve up to subscribers. Sweet. That's how Microsoft lost its vanilla swill.

Microsoft was a Motley Fool Inside Value recommendation earlier this year. The fact that its shares have been stagnant, trading well off their 1999 peak, has made the world's largest software company an attractive holding in value investing portfolios. That's because the company's still a money-making machine. Now, if URGE gets its way, Microsoft may very well be a dancing machine, too.

Digital music is a high-growth industry, and it's just the kind of industry that is often explored in our Motley Fool Rule Breakers newsletter service. Check out which satellite radio provider recently made the cut and more with a free trial offer.

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Longtime Fool contributor Rick Munarriz wonders if Bohemians dig Rhapsody. He does not own shares in any of the companies mentioned in this story. He is a member of the Rule Breakers analytical team, seeking out tomorrow's great growth stocks a day early.