Is MTV Scared of Internet Music?

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This time around, Universal is doing a little better. For starters, it has more music, having signed up music from EMI and BMG, which has since merged with Universal's press play partner Sony (SNE). In fact, other than Warner Music Group (WMG), Universal has music from every other company in the biz.

IMF is basically a Web site that's wall-to-wall music videos. It includes a companion TV lineup that features concert shows and music anthologies. You want Universal rapper 50 Cent? Or newcomer Joss Stone from EMI's Virgin label? They're available, and for the most part free. (Video on demand is available for $4.99 a month on Sprint's (S) cell phones as well.)

Who Wants Their IMF?

Who is watching IMF? Well, there's the rub. According to IMF, it gets an anemic 47,474 unique visitors a month to its Web site. And while it has 17 music channels on the online TV site Joost, and two channels on British cell-phone company Vodafone (VOD), it has just about no U.S. TV presence. It is available to some of satellite-operator DISH Network's (DISH) nearly 14 million subscribers, a couple of tiny local cable companies, and the still smallish Internet-based cable systems being rolled out by telcos Verizon Communications (VZ) and AT&T (T).

The company claims it has the potential to reach 10 million TV viewers in all, a far cry from the 91 million U.S. viewers that MTV gets in the U.S. (or for that matter the 90 million who can get MTV sister channel VH1 or the 59 million who get MTV2.)

It ain't MTV, that's for sure. But give Universal credit for trying. It's still pitching cable companies, although few of them seem to have the added channel capacity to take on another music channel when MTV is such a huge presence. A Cox cable executive says it met with IMF executives, but it is focused now on adding channels to its digital tier instead of the "linear" style channel that MTV offers.

Not Afraid to Make a Grab

And even at DISH, you can't get IMF on some cheaper packages. (A little history here: Universal parent company Vivendi had to go to court to get on the satellite service. In 2001, Vivendi invested $1.5 billion in Dish's parent company, Echostar Communications, getting the right to create five channels as part of that deal.)

Still, Universal executives say privately that IMF was profitable two years after it was launched, with a fairly tiny programming budget and revenues coming in from a video-on-demand service with Sprint mobile and other deals. The company intends to keep plugging away to get more eyeballs, says Universal Music Chief Financial Officer Nick Henry. So maybe it's not MTV. Maybe it never will be. But you have to hand it to the folks at Universal Music: They never seem to shrink from the challenge of squeezing nickels out of their music.

Grover is Los Angeles bureau chief for BusinessWeek.