"We will be the beneficiaries of what happened with Napster."
——MTV Networks Chairman Tom Freston

A NEW PLAN FOR MTV

MTV, MTV2, MTV.com To Be Combined In Delightful New Ways — Music Will Be Played!
The MTV cable network is reinventing itself, integrating its two cable channels with its website to create "a multimedia version of the MTV brand," reports The New York Times.

The new plan for the channel includes offering viewers (for a fee) first access to new music. MTV also hopes to persuade cable operators to expand the distribution of MTV2.

The MTV360 project will be rolled out gradually in the next few months and will be in full operation by July, according to MTV execs. The plan is based on research indicating that the young viewers who watch MTV are watching while simultaneously connected to the Internet, the Times reports. Another aspect of the plan includes adding instant messaging to the MTV website.

MTV360 will call for a re-emphasis on music, which, incidentally, is what the "M" stands for.

Even though series programming on MTV—such as "Road Rules" and "Jackass"—have built the network's largest audience, MTV execs have decided that a reliance on music is the key to maintaining connection to a young audience.

The channel averaged roughly 431,000 viewers a minute last year—its highest numbers ever—and is up 8% for the first quarter of 2001.

"We are going to be more music-focused than ever," said Judy McGrath, president of the MTV Group.

That sentiment was echoed by MTV Networks Chairman Tom Freston. "You are not going to be seeing any increase in non-music series on MTV," Freston told the Times. "Any new non-music series that we do in the future will replace the non-music shows we have on now."

The programming on MTV, MTV2 and MTV.com will be scheduled "contemporaneously," directing viewers from one location to another.

The Times cited an example of how the concept would work. Three weeks ago the Dave Matthews Band appeared on "Total Request Live." During that show, viewers were directed to MTV2 (which was playing the complete Dave Matthews video collection) and to MTV.com (where they could legally download a cut from the band's new album for free). RCA, the band's label, had agreed to the download concept because it was looking for a special promotion to launch the album, which then debuted at #1 with nearly three-quarters of a million units sold in its first week of release.

"We are very close to agreement with every major record label," said Nicholas Butterworth, president of MTV's interactive division, "[to allow] secure downloading that would protect both the artist and the label." Butterworth emphasized that MTV.com will use new technology that will enable only the person who orders a song to be able to play it back.

With Napster on the legal ropes, an agreement like this between the major labels and a major player such as MTV has far-reaching implications.

"We will be the beneficiaries of what happened with Napster," Freston said.

According to Butterworth, the channel will charge the user a fee to download music, either on a per-song basis or through a monthly subscription fee. "There is certainly a financial upside to distributing music," Butterworth said. But as far as what kind of cut MTV might take in that scenario, he added, "We haven't worked out the business model yet."

"This is really all about establishing a deep connection with our audience," Freston said. "Every three years we have a new campaign."

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