Microsoft and MTV Gang Up on Apple’s iTunes and iPods

by Janet Meyer May 16, 2006

Starting Wednesday, a beta version of URGE, iTunes’ latest competition will be available. Some say that this time Apple will be up against some real competition.

The challengers are Microsoft Corp. and MTV Networks. You might have heard that they are teaming together to introduce a new music service that works with Windows Media Players. The plans are to offer it with the Vista operating system. For those who like to be the first to try new services, the beta version will be offered this week.

This is a service similar to the newly designed Napster. Users get the option of individual 99 cent downloads or a couple of different subscription options. Like other subscription services, you need to purchase each song separately that you plan to keep if you ever quit subscribing. Preset music playlists, internet radio stations, and streaming videos are also available. Unlike Napster, this service doesn’t offer the opportunity to listen to each song up to five times before making a decision.

According to The iPod Observer and other sites, analysts view the new service (called URGE) as a potential threat to iTunes. In this same article, MTV’s Chief Digital Officer was quoted as saying that he sees the two services as complementary. In his view, they are trying to get to potential customers who are not yet buying online music.

However, Microsoft isn’t being so modest. Geoff Harris, the Product Unit Manager for Windows Media Player, states that Urge is “significantly better” than iTunes and could challenge Apple for dominance in the digital music arena.

I don’t see any real differences between URGE and other subscription sites. As stated in iTWire, subscription services haven’t been much of a threat to iTunes. The only thing I can see that might make them serious competition is the power of advertising on MTV.

Though MTV claims it is not trying to take market share from iTunes, the demographics for iTunes users and MTV viewers are largely the same. MTV currently offers some of its programming on iTunes and says it plans to keep it that way.

In light of the recent pricing controversy between iTunes and the major labels, it’s interesting to note that URGE offers the same 99 cent pricing. With more digital download competition, it seems the record industry might have a chance to someday get its way. If some other service becomes big enough, the labels could pull music from iTunes and go exclusively with services that offer variable pricing.

What do you think? Will Urge offer any real competition? If it does, will this affect pricing in the future?

One other issue is, of course, the incompatibility of Urge with iPods. It will be interesting to see what difference this makes in URGE’s plans. It could hurt iPod sales if URGE becomes real competition. Then again, this same conflict could prevent Urge from ever taking off. It’s unlikely millions of iPods users will give up their iPods for a new digital download service. And let’s face it, even a dynamic duo like M and M can’t hope to beat the iPod+iTunes seamless delivery. Or can they?

Would you consider changing to another MP3 for URGE? Maybe it will become common for consumers to own an iPod and another MP3 player. What do you think?

Editor’s Note: And what’s with the all caps URGE? A gimmicky marketing ploy to make it stand out on the page! They are desperate.



  • I fully expected M$FT to get in this game sooner or later, as granting Apple superiority in anything is blasphemy to Ballmer. But I find it ironic that they would partner up with MTV of all things, as that network hasn’t been “about the music” for a long, long time. Anytime I channel surf past there, all I see are celebrity exposes or reality programming - I can’t remember the last time I saw an actual music video. The kids today (so my 17-yr old daughter informs me) are watching Fuse. Apple still maintains a commanding lead in this area, and they have proven that they won’t sit on their hands where innovation is concerned. I just don’t see kids dropping their iPods and flocking to the new store on the block. But hey, Bill of Borg has been willing to throw away billions on XBox just to steal some market share from Sony, so perhaps he figures if he just hangs in there long enough, Apple will make a mistake he can profit from.

    tao51nyc had this to say on May 16, 2006 Posts: 45
  • I’m not so interested in Urge so excuse me if this is the wrong place to talk about this, but the new WMP11 has some nice graphical ways of browsing that I hope Apple will take note of. iTunes needs competition, however much I like it.
    Take a look at

    kareneliot had this to say on May 16, 2006 Posts: 2
  • Instead of separate fees for subscriptions, I think the music stores would be better off if they offer a minimum purchase per month requirement to qualify for free subscriptions.  Say buy $9.99 worth of downloads then you get a month’s subscription free.

    I would buy a lot more music if I could listen to more than just snippets of songs.  Sometimes the snippets let you hear only the intro.  What use is that?  I’ve been burned a few times with songs that I thought were great on the sample snippets but were terrible when you hear the whole track.

    tundraboy had this to say on May 16, 2006 Posts: 132
  • Microsoft products always look good until you have to actually use them. For me, I could care less. I don’t follow MTV, never have. As for Windows Media Player, I’m on a Mac(3), I use iPods(3). The M&M boys are offering nothing that interests me.

    cloudwall had this to say on May 16, 2006 Posts: 21
  • The EU is going to absolutely pwn microsoft over this.

    Benji had this to say on May 16, 2006 Posts: 927
  • I know I shouldn’t put this out there because someone could really take my advice and actually beat iTunes, but here goes….

    The key to beating iTunes is ... lower prices, fewer DRM restrictions.  With these things you would take away iTunes dominance at an alarming rate.  Note: working with the iPod is required too, but if you were to sell mp3’s, you’d be compatible with iPod automatically.

    Of course that would require the people who want to compete with iTunes to not act like brain damaged morons.

    BigW had this to say on May 16, 2006 Posts: 10
  • In the USA, Apple’s huge marketshare in players and the success of the iTunes Store mean that the barriers to entry into this market are prohibitive.  If 80% of MP3 players are iPods and these consumers cannot buy from URGE, there is no hope of URGE displacing iTunes, or even offering any real competition.

    However, URGE may make inroads in markets where the iPod has less marketshare, such as in Europe - and many commentators seem to forget that the rest of the world does not slavishly follow the USA.  Take AOL for instance - who uses AOL outside the USA?  However, I suspect Apple’s marketshare will continue to grow rapidly in Europe and elsewhere for the same reasons they were successful in the USA - a great product (iPod), lots of content (iTunes), and a seamless interface between the two.

    sydneystephen had this to say on May 16, 2006 Posts: 124
  • BigW said: “<i>The key to beating iTunes is ... lower prices…<i>”

    Are you being serious?? LOWER than $0.99?? You can’t go much lower without making it pointless.

    Luke Mildenhall-Ward had this to say on May 16, 2006 Posts: 299
  • Yes, I am serious.  For someone to beat iTunes, their prices will need to actaully be lower per song.  Same just isn’t going to cut it.  There would be no incentive to switch.

    But somehow the recording industry thinks that an online music store with the same or higher prices, more restrictive DRM and incompatibility with the iPod actually has a chance of competing against iTunes.

    The music industry is utterly, completely, and totally STUPID.  They are beaten.  They cannot beat iTunes with URGE or any other service until they are better on price AND with less DRM than iTunes.

    BigW had this to say on May 17, 2006 Posts: 10
  • It is pointless to compete against iTunes on price and DRM features.  If necessary, Apple will just lower their download price to match any credible competitor.  And despite the constant online drumbeat of complaints about DRM restrictions, most iTunes customers are pretty happy with the current set-up.

    At this point, I think there is nothing anybody can do to dislodge iTunes/iPod as the dominant music download service and music player.  The only thing that might work is if some company gives away millions of free music players, and that will only get into the crappy bottom end of the market.—The equivalent of prepaid cell phones.

    In just the same way that MS has a lock on office suites, Apple owns the digital music download/player market.  Hardly anybody is upset about the former, why are there so many frothing in the mouth about the latter?

    tundraboy had this to say on May 17, 2006 Posts: 132
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