MTV is partnering with mobile operators to launch OTT initiatives in both online video (MTV Play) and music subscriptions (MTV Trax).   MTV Play is a video on-demand (VOD) service featuring 1,500 hours of MTV content, including some episodes of Catfish which will be available at a premium prior to airing in the linear window. The MTV Play app will be launched on March 5^th in Germany, Switzerland and Romania. While current subscribers to MTV Mobile branded tariff in these countries will have access to MTV Play at no charge, the cost for new subscribers to access MTV Play will be €2.99 per month or €29.99 for the year.

MTV Trax, launching today in the UK and in New Zealand later this year, is a pay-as-you-go music service targeted at prepaid mobile users in partnership with mobile operators. This new service, powered by MusicQubed, differs from services like Spotify or Deezer in that it is not a streaming service, rather music playlist are downloaded to smartphones via WiFi or cellular. MTV Trax offers consumers a curated playlist of the 100 hottest tracks which is refreshed daily.

The MTV Trax app is available for download on iOS, Android and Windows phones. After a two week free trial, the first 10,000 subscribers to the premium version of the App and subscribe prior to April 2^nd 2015 will have promotional subscription price of £0.79 per week, £7.99 for 3 months, or £12.99 for a total of 6 months subscription. Consumers who do not qualify for one of the promotional subscription will be able to subscribe to MTV Trax at standard subscription fee of £4.99 a month for Apple users; £4.49 a month for Android/Windows users; and one-off payment of £1.49 for a 7 day subscription.

According to Chris Gorman, founder and CEO of MusicQubed, MTV Trax is a more rewarding model than the freemium/ad-funded services (at least for the music industry), because it is 100% paid and introduces “windowing” to the music industry. For operators, they can bundle it as top-up rewards to drive loyalty and get a slice of subscription revenue for using their prepaid billing platform. It’s not going to take over the world but it is a relatively risk free opportunity for operators to play in the digital music ecosystem. Given its established brand, MTV hopes to bring some credibility to the market that operator’s lack.

MTV Trax is not designed to compete against Spotify, Deezer or other subscription services, but rather it offers a proposition to casual music listeners that want a lean back experience and/or have a low tolerance towards advertising. Considering that millennials comprise a significant portion of MTV’s TV audience, an MTV branded services (MTV Trax) targeted at millennials on prepaid mobile plans makes some sense, however, despite MTV efforts to offer a different type of music service, there are still a couple of challenges MTV Trax must overcome.

•  People’s music tastes are diverse, even within clearly defined demographic cohorts such as millennials. A fixed set of 100 tracks may not be sufficient to appeal a large enough cross-section of the market.

•  Although £0.79 a week may be attractive at first, costing about a third of a Spotify subscription, there is a huge difference between the ability to access 100 songs Vs. 20 million songs.

•  While recent debates over unfair royalty fees paid via the ad-supported modelscontinue to intensify, MTV’s strategy could be more rewarding to the industry, but will MTV Trax appeal to a large enough audience to be successful?