The project, dubbed MTV360, is the cable network's latest effort to marry the old and new media through a range of features, such as a music-download service, instant messaging and an Internet radio channel. It unites MTV.com, the MTV channel and MTV2, which features only music videos.
The cable network faces stiff competition with AOL Time Warner, which has been beefing up its online music offerings, including Spinner, Winamp and the AOL Music Channel. In January, AOL Time Warner's America Online unit said it would expand its relationship with Warner Music Group by promoting new releases from Warner's labels, including Atlantic Recording, Elektra Entertainment Group, London-Sire and Warner Bros. Records.
Analysts said that although AOL Time Warner knows how to work the Web to its best advantage, they see MTV360 as a good move.
"By being able to bring the two parts of the MTV universe together along with their reputation for music in the industry and with the digital distribution aspect, they really have a powerful model to move forward in the music industry," said Jarvis Mak, analyst at Nielsen/NetRatings. "They understand their audience...Every new high school class is a new audience for them."
Solid fan base
Mak said that MTV already has a large number of music fans logging onto its Web sites. MTV.com received 2.6 million unique visitors for February, falling between popular online music sites MP3.com at 3.3 million and MusicMatch at 1.5 million, according to Nielsen/NetRatings. MTV-owned VH1.com had 690,000 unique visitors in the same month.
As part of the new project, MTV will offer instant messaging to let music fans interact with one another. If a music fan were watching an MTV show, that person could find and chat with other viewers. It also is providing an Internet radio player on MTV.com. Launched last week, the Radio MTV player includes 42 different channels ranging from hip-hop to garage music.
Nicolas Butterworth, chief executive of MTV's Internet arm, said that although the company is still trying to figure out the right business model that balances the needs of artists and consumers, it will probably offer some form of subscription service.
He added that MTV is already working with the major record labels to ensure the radio station is compliant with the Digital Millennium Copyright Act. It pays a license fee to labels and artists so that they're compensated for their work, an arrangement that has been lacking in many music-swapping services, such as Napster.
Butterworth said MTV has been experimenting with convergence programming since 1995; it decided to launch MTV360 now because technology is available that lets the company build a music application service as well as "strong community features."
"Our audience has become an incredibly wired, techno-literate audience who's fundamental approach to entertainment has changed," Butterworth said. "We think that there's a huge difference in the way young people approach entertainment today in the post-Napster era than they did three or four years ago. People expect to get things on demand, they expect to access them anywhere, and they expect to share them with friends."
MTV said it will also offer advertisers MTV360 packages to sponsor the new project, which will be announced on-air in the next two weeks.