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Rhapsody, Urge, VCAST Join Forces

8/21/2007 02:29:00 PM Eastern

New York — RealNetworks, MTV and Verizon Wireless teamed up to announce a new music service to ultimately replace the current Rhapsody, Urge and VCAST music services and which will likely deliver over-the-air downloads.

MTV and RealNetworks formed a new company, Rhapsody America, which now becomes the exclusive digital music service for RealNetworks and MTV brands in the United States. This service will also be delivered over Verizon’s VCAST platform and will become “the exclusive music service offered by VCAST,” said a spokeswoman.

It is expected in the alliance will offer over-the-air downloads, although specific services and pricing will be announced in the future.

Similarly, RealNetworks chairman and CEO Rob Glasser said the new venture will help Rhapsody achieve its ultimate goal of becoming “the jukebox in the sky everywhere.”

Another aspect of the joint venture will be stepped-up marketing. “The intent is to open up the fire hoses from a marketing standpoint,” said one executive.

MTV reaches tens of millions of consumers every month and will kick off its marketing for the service during the 2007 Video Music Awards on Sept. 9, it said.

For its part, Verizon noted that it now offers 4GB of memory in its mobile phones, sufficient to store thousands of songs. It will upgrade to 8GB of memory by the end of the year and to 16GB by mid-2008 so that customers will be able to carry their entire music collections on their mobile phone, said Verizon executive VP and chief merchandising officer John Stratton.

Michael Bloom, previously GM of MTV Network’s URGE, will head Rhapsody America, which will have offices in New York, Seattle and San Francisco.

Presently, MTV’s URGE users, when they sign on, will be able to log onto Rhapsody’s subscription music service and eventually URGE users will be migrated to the new Rhapsody, which will include URGE content.

In the coming months, Verizon will roll out the capability to send a duplicate copy of songs purchased over the air, directly to a customer’s Rhapsody account. The service will also allow the transfer of subscription music from a Rhapsody account to a mobile phone, said the companies.

There are currently 2.7 million users for all Rhapsody premium services.

Certain financial details of the venture are expected to be revealed later today in a RealNetworks earnings call.