Viacom's (NYSE:VIA) MTV and Warner Music Group (NYSE:WMG) made a bit of beautiful music together yesterday.
Both companies jammed on an arrangement that will see WMG supply content to MTV for the network's mobile video offerings. MTV will use music videos from WMG's portfolio to create new shows for its various mobile brand lineup, which includes MTV, MTV2, VH1, and international properties VIVA and Flux. In addition, WMG content will be featured in shows from MTV's broadcast networks that have been adapted for wireless use. Sean Paul, Green Day, and Twista were mentioned as examples of artists that potentially could be used in this deal.
Lest anyone forget, cell phones aren't just for emergency tow-truck calls anymore. Mobile devices have become bona fide little entertainment centers. Whether it's News Corp.'s (NYSE:NWS) Fox distributing its shows to users or video game publishers such as Activision (NASDAQ:ATVI) or Electronic Arts (NASDAQ:ERTS) offering their software for download, media companies want to turn cell phones into sales channels.
MTV is a perfect ally for WMG's ambitions in this arena. Let's face it, the MTV generation is now also the wireless generation -- its members are always on the go, firing off text messages or scouring for local movie showtimes and a host of other information. (I'd like to see more of them scouring for undervalued stock prices, but that's a whole other issue.) MTV's brands will provide WMG with quality exposure for its artist roster.
Will licensing WMG's content for wireless distribution improve the company's long-term prospects as an investment? It's certainly a step in the right direction. While I do think it's a great move to capitalize on the teen crowd's fascination with their mobile communicators, digital piracy remains a significant concern for me. That problem needs to be solved before I think about investing in WMG.
MTV is an ace marketer, and I'm sure the company will create compelling content with WMG's video assets, even as both benefit from the cell phone zeitgeist. But for now, when Viacom divides itself in two, I'll be checking out the MTV Networks portion.
I want my Foolish Takes:
- Viacom's Moving Pictures
- Warner Music's E-Buzz
- MTV Discovers the Caribbean
- Warner's Broken Record
- We also have the Viacom discussion board at your disposal.
Activision and Electronic Arts are Motley Fool Stock Advisor picks.
Fool contributor Steven Mallas owns none of the companies mentioned. He also fondly remembers a time when MTV used to play Devo videos a lot. The Fool has a disclosure policy.
