Report: UMG Inks Mobile Content Deal With MTV
September 12, 2006 at 10:45 AM (PT)
UNIVERSAL MUSIC GROUP (UMG) is expected to today announce a deal giving MTV NETWORKS a blanket license to its songs, videos and other content for mobile devices, reports the LOS ANGELES TIMES. The deal comes at a time when consumers have yet to readily-embrace the purchase of digital content over mobile devices.
"Probably only 1% of cellphone owners regularly consume mobile videos and songs," said NEIL STROTHER, a wireless analyst at market research firm NPD GROUP. "And it isn't growing very fast, largely because of a lack of awareness. So in that respect, deals like the UNIVERSAL and MTV agreement show that major companies are aligning to push mobile content. That's an important first step, but there is still a long way to go."
Today, about 44% of the 208 million cellphones owned by Americans are capable of playing videos and songs, according to JUPITER RESEARCH. That said, only 20% of owners have ever downloaded anything to these phones. Furthermore, studies show few mobile consumers say video or music capability is something they care about.
UMG and MTV hope to combat consumer lethargy by making exclusive content for cellphones available. "To build an appetite for mobile content, there have to be video clips and shows and songs that you can only get on your phone," said RIO CARAEFF, a digital executive with UNIVERSAL MUSIC. "We want to spur the creation of those clips by making our entire catalog available to MTV. The industry has to push our products in front of people, instead of waiting for them to ask."
CARAEFF said that UMGc would complete similar blanket licenses with other mobile content creators and cellular carriers and that rival music companies probably would follow suit. The terms of the deal with MTV were not revealed, but sources close to the negotiations said the record company would receive payment each time one of its songs or videos is used in MTV's mobile programming.