MTV puts fans first at online music store
While Apple Computer, Microsoft and others target a potentially vast market for paid music downloads, Viacom's MTV unit is setting its sights closer to home.
In his first remarks on MTV's planned music download service, an MTV executive in charge of online properties described more limited ambitions than the company's chief executive officer did when he announced the service earlier this month.
"I look at us as serving our audience that we have built in from years of great programming in our channel brands," said Jason Hirschhorn, whom MTV said Wednesday it has promoted to senior vice president for digital music and media. "Those are the people we're aiming to get...a lot of people come to our Web sites and I think those will be users of our service going forward."
Hirschhorn will manage the online operations of an alphabet soup of Viacom entertainment brands: MTV, MTV2, VH1, CMT, CTN and Comedy Central.
When he announced MTV's music download service earlier in the month, MTV Chief Executive Tom Freston said the service would compete with iTunes, among others.
Hirschhorn said MTV's service will do that to some degree, but he stressed that it would focus on existing users of MTV properties, whom he said numbered 20 million "hypertargeted" music fans per month.
Competing generally in paid music downloads has gotten tougher in the few weeks since Freston made his remarks. Microsoft this week said it would build its own online music store, though speculation that the company would get into that business was rife in the industry for months.
MTV's service is scheduled to launch in the first half of next year.
Analysts have praised MTV's brand as a key asset in launching a store, but they lamented its lateness. And the challenges of the so-called a la carte music sales business--in which consumers buy songs individually, rather than through a flat-rate subscription plan--are severe.
Apple executives have freely admitted that iTunes isn't making money for the company, at least not directly. Instead, the service is driving sales of its iPod music storage and playback device.
Despite the hurdles, Hirschhorn expressed optimism that the paid download market would thrive, and that wholesale prices of single tracks would subsequently fall.
"It is a tough profit margin in a la carte--(it's) better in the subscription business," Hirschhorn said. "Prices are going to come down as the business gets bigger. I don't worry about that, because the publishers know that there has to be room for profit and margin....There are a lot of smart people at the record labels, and they will get into this business at a rate they're comfortable with."
Hirschhorn started with MTV's Sonicnet when that unit was part of MTVi, an ultimately unsuccessful effort to brand the company's collection of online media properties under one umbrella.
Nowadays, Hirschhorn sings the praises of MTV's individual brands.
"These are not cookie-cutter sites, and you'll never see the brands mixed together to consumers," Hirschhorn said. "The efficiencies are in technology and working on the back-end. They each control their own creative destiny and will retain their own identities."