Internet killed the video star

As the digital revolution gathers pace and the export of American culture becomes increasingly fraug

"I heard you on the wireless back in '52": the opening lyrics to the Buggles's "Video Killed the Radio Star" were the first words to be heard when MTV launched on 1 August 1981. The playlist for the first hour featured videos by Pat Benatar, Rod Stewart, The Who and the Pretenders. By the following year, 9.3 million people had subscribed. In 1983, Michael Jackson's "Thriller" video, which clocked in at more than 13 minutes, was widely credited with launch- ing the pop video as an art form. The 1990s were the golden age of MTV; it launched channels across the globe, eventually boasting more than 70 million subscribers.

On the eve of the channel's 25th birthday, however, a crisis is looming. The music industry has been transformed since MTV's launch, with new temptations of the iPod era hitting the target demographic of 18- to 24-year-olds. Ratings have risen only 5 per cent over the past five years, compared to its sister channel VH1's 17 per cent growth. The company itself admits there is a problem. "I've been deeply paranoid since the day it launched," Judy McGrath, CEO of MTV Networks, said recently. "I've always been afraid it's an Eighties idea. I don't know what the new company is going to feel like, but we'll be expected to grow and deliver."

There is a certain false modesty to this statement, as MTV's reach is still global. The company is a $7bn-a-year operation, broadcasting in 28 languages over 50 channels in 168 countries. It reaches 440 million households, including 17 million viewers in the UK. MTV Networks runs Nickelodeon (three channels), VH1 (five), Comedy Central and seven MTV channels. Twenty new channels launched in 2005 alone. According to MTV, eight out of ten viewers are outside the United States.

However, outside the US, one of MTV's biggest competitors is now local programming. While it remains a huge brand on the global stage, MTV has to compete in every country with channels that are able to offer a small-scale, community feel. A secondary threat comes from digital media, which offer consumers the opportunity to exercise a level of control over their viewing and listening habits that MTV is unable to match. On internet chatboards, bloggers have made clear their preferred way forward: "Demand-MTV" - the video that they want, when they want it (and, begs one blogger, "with karaoke option").

As a result, the channel has diversified, shifting its emphasis away from music. It no longer shows any music videos during the day, devoting a large part of its airtime to reality and lifestyle TV shows. In the 1990s the channel commissioned one animation that seeped into the popular consciousness - Beavis and Butt-head (1993) - and with the 21st century came Jackass, The Osbournes, Cribs and Pimp My Ride. Music videos have since become the preserve of the offshoot, specialist "genre" channels, such as MTV Base, which is geared towards urban music.

One way for MTV to manage its entry into the digital era could be for it to branch out into the so-called "social media", exemplified by the internet site MySpace. This is one market where MTV's core emphasis on youth lifestyle could come into its own. Last year the channel's parent company, Viacom, lost out to Rupert Murdoch when he bid $580bn for the MySpace parent company, but experts say it is not too late for MTV to fight back. "Social media are just beginning and growing rapidly, which leaves plenty of space for new entrants with a strong heritage like MTV," says Jaap Favier, research director for the independent technology research company Forrester. "In fact, if MTV can convert its strong brand into a community successfully, it will lure bloggers away from those sites."

Last year, Judy McGrath announced that "media identities are up for grabs" and that MTV, in the wake of its failed attempt to buy MySpace, would be adopting a "digital Marshall Plan", involving mobile phones, broadband channels and video games. The fightback also involves pushing new "community" and niche projects, many of them overtly politically correct and interactive. MTV has launched Logo, a gay and lesbian channel; a children's website called NeoPets; and, with Microsoft, a music download service, called URGE (dubbed "the first serious rival to iTunes"). Channels have been created for particular ethnic groups in the US: MTV Desi for south Asian Americans, MTV Chi for Chinese Americans, and, since 27 June, MTV K for Koreans.

The backdrop to all this diversification and cultural sensitivity is that, in the current political climate, promoting American culture and values has become an increasingly loaded act. "When I was a kid almost any popular culture that came from America was cool," says Gideon Simeloff, a strategy adviser to the media sector. "Culturally, things are different now." Keith Harris, chair of MusicTank, the British music-business network, says: "I don't think MTV has the cool factor any more: it's an institution."

Some in the music industry hold MTV responsible for a wider decline: of grass-roots musical innovation. "The thing that's sad now is that music is a corporate lifestyle choice," says the composer Daniel Pemberton. "If you create something that doesn't fit on the right supermarket shelf, it won't sell." Forget the digital revolution: for Pemberton, "the real revolution will come when someone launches a successful new act without the involvement of a major label. Institutions like MTV stop that from happening."

Some suggest MTV could harness its power to become a serious backer of ground-breaking music at the grass roots. "They could become a distributor and promoter themselves for starting bands - like Arctic Monkeys - which are not backed by the majors yet," says Jaap Favier. He emphasises the idea that MTV must buy in to the kind of "consumer-generated content" upon which MySpace relies.

So it's change or die for the original music channel. In the digital age, young people don't just want to watch videos; they want to feel plugged in to their "community" as well.

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