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MTV Hopes Its Viewers Now Want Multimedia
Bill Carter New York Times Service
Tuesday, March 27, 2001
http://www.iht.com/articles/14802.htm.com/r/sr=news/ss=music;

Music Channel to Merge TV and Web Site
NEW YORK Looking to evolve with its youthful audience, the MTV television
network will integrate its cable channels with its Internet site to create
what its executives call "a multimedia version of the MTV brand."

The new plan aims to take advantage of the recent travails of the
music-sharing Web site operator Napster Inc. by offering viewers, for a fee,
first access to new music. MTV also wants to cable operators to bolster
distribution of its second channel, MTV2, by using its promotional clout to
trumpet the advantages of high-speed Internet connections.

The project, known as MTV360, will be rolled out in the next few months and
is built on research showing younger MTV viewers are already watching
television while communicating on the Internet, MTV executives said.

Indeed, another element of MTV360 calls for adding instant-messaging
capability to the MTV Web site, which will give users another means to keep
watching one of the cable channels while they're online on MTV.com.

MTV, owned by Viacom Inc., intends to schedule programming both across its
cable channels and its Web site, directing them from one location to another,
and selling all three platforms to the same advertisers.

The new strategy will call for a re-emphasis on music, the format that formed
the foundation for MTV when it was created 20 years ago, but which the main
channel has scaled back in recent years in favor of series programs such as
"The Real World" and "Jackass."

Music videos still appear on MTV, but they comprise the entire programming
format at MTV2. And audiences for MTV, built significantly on series
programming, have never been larger.

The channel averaged about 431,000 viewers per minute last year, its best
figures ever, and the main channel's viewership is up 8 percent in the first
quarter of 2001. MTV executives have decided a reliance on music is the key
to maintaining a younger audience.

"We are going to be more music-focused than ever," said Judy McGrath, the
president of MTV Group. Tom Freston, the chairman of MTV Networks, concurred,
saying viewers "are not going to be seeing any more non-music series on MTV.
Any new nonmusic series we do in the future will replace nonmusic shows."

As an example of how the concept will work, the executives cited a recent
appearance by the Dave Matthews Band on MTV's daily music show, "Total
Request Live." During the show, viewers were also directed to MTV2 - which
was playing the band's complete collection of music videos - and to MTV.com,
where the audience could legally download a song from the group's new album
free of charge.

Ms. McGrath said the group's record label, RCA, agreed to the downloading
arrangement because it was looking for a special promotion amid concern about
a new direction the group was taking with its music. The album opened as the
biggest seller in the United States, with more than 700,000 units sold in its
first week of release.

Nicholas Butterworth, the president of MTV's interactive division, said the
company was nearing an accord "with every major record label" to allow what
he called "secure downloading that would protect both the artist and the
label."

Napster, the file-sharing service that made it possible for computer users to
download large quantities of music free, has been sued by major music
companies, which accuse Napster users of stealing intellectual property. A
court injunction in that case requiring Napster to block access to songs the
music industry has identified as copyrighted material has drastically
curtailed the company's activities.

"We will be the beneficiaries of what happened with Napster," Mr. Freston
said, pointing out that after Napster, MTV.com has been the
second-most-popular music site on the Internet.

Mr. Butterworth, who emphasized that MTV had no intention of introducing a
file-sharing system, said its Web site would use new technology that would
enable only the person who ordered a song to play it back.

The channel would charge users a download fee, Mr. Butterworth said, on a
song-by-song basis or through a monthly subscription fee for a particular
quantity of music.

The title MTV360 comes from the term "360," or full circle, used in
skateboarding and surfing, Ms. McGrath said. The choice reflects the
company's continuing effort to maintain its relevance in a market that
changes with almost every high school graduating class.

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

The channel relies heavily on research into youth trends. Betsy Frank, the
executive vice president of research for MTV, said the channel's latest
"leisure-time study" revealed a number of facts that went into the new
strategy, including a doubling of Internet music use and evidence TV and the
Internet were less likely to be competitive than complementary.

"Younger people are not watching less television, they're watching more," Ms.
Frank said. "They are also leading the pack in finding new ways to use the
Web. That's why what we do to reach them should be seamless."

It was essential to incorporate instant messaging into the MTV Web site, Mr.
Butterworth said, because the main thing young viewers are doing on the
Internet while they watch television is communicating with friends.

And somewhere on the screen, Mr. Butterworth said, there is sure to be a
place where users can plug in their ZIP codes to find out what local
companies offer high-speed Internet connection.

That service is aimed at addressing the needs of cable operators who have
invested heavily in that business. Mr. Freston said MTV360 would heavily
promote "the benefits of buying a high-speed cable modem."

The benefits for MTV in that promotion may be increased distribution for
MTV2, available in about 30 million households in the United States, less
than half of MTV's 80 million homes
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