MTV Networks and RealNetworks Inc. will merge their online digital music stores to create Rhapsody America, a new service distributed by Verizon Wireless. Per terms of the joint venture, MTV Networks will integrate its Urge service, launched in May 2006 with Microsoft, with RealNetworks' Rhapsody subscription service, which offers access to its entire catalog for a monthly fee and also sells individual songs. At a press conference Tuesday, MTV president Van Toffler said Rhapsody America content will be accessible via PC, portable music devices and mobile phones--the platform will serve as the digital music storefront for all brands under the MTV Networks umbrella, and the broadcast giant will launch an integrated marketing campaign promoting the new service during MTV's Sept. 9 broadcast of its annual Video Music Awards.

Financial terms of the joint venture were not disclosed, although RealNetworks chairman and CEO Rob Glaser said an investor call is scheduled for later in the day. The Rhapsody America pricing structure also remains under wraps. In fact, the companies are not yet providing any details on how to bring the service to market.  John Stratton, CMO of Verizon, said the companies are still working on integrating the services. The companies also wouldn't comment on the length of this exclusive partnership, saying only that it is intended to be a long-term partnership. Michael Blume, who served as CEO of MTV's Urge initiative, was named GM of Rhapsody America--according to Toffler, MTV is still in discussions with Microsoft regarding the ultimate fate of the Urge service and brand, adding it will remain live on Windows Media Player 11 until further notice.

In 2006, RealNetworks acquired integrated mobile music and entertainment solutions provider WiderThan for $350 million cash. WiderThan boasted ringback, music-on-demand and related mobile content partnerships with more than 50 wireless carriers in more than 25 countries, among them Verizon Wireless. While RealNetworks announced a DRM-free download trial with Universal Music Group during this morning's press conference, Rhapsody America will not offer content in DRM-free or MP3 format, at least not at launch.

In related news, retail monolith Wal-Mart said it will sell DRM-free MP3s on its website at 94 cents per track and $9.22 per album. Wal-Mart promises the downloads--drawn from labels including Universal and EMI Music--will play on nearly any portable media player, including Apple's iPod and iPhone as well as Microsoft's Zune. According to Wal-Mart, the new MP3 catalog will include hundreds of thousands of songs and albums at launch--the retailer will also continue to offer its existing WMA-format music downloads at 88 cents per track.

For more on the Wal-Mart announcement:
- read this release

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