Amid its huge investment of resources into the 'Net, MTV made a big push in early 2006 to launch Urge, a digital music service that would compete with iTunes.

But just over a year later, MTV is calling it quits on Urge. Though the company didn't disclose figures, sources indicated it was unsuccessful despite a major marketing push on-air, online and outdoors, as well as a partnership with Microsoft to feature Urge on its ubiquitous Windows Media Player software.

So rather than trying to compete on its own, MTV is investing in one of iTunes' biggest competitors, Rhapsody. Cable conglom and that service's parent company, RealNetworks, are turning Rhapsody into a joint venture controlled 51% by Real and 49% by MTV.

Verizon Wireless will bring the service to cell phones, though it's not an equity stakeholder.

MTV, which is obligated to provide $230 million worth of advertising over five years, along with an undisclosed amount of cash, in exchange for its stake, seems confident that Real will prove a more beneficial partner than Microsoft.

At the least, its decision to invest in Rhapsody makes clear that in the face of Apple's dominance of the digital music space, even MTV can't compete on its own.

Labels: News