Viacom’s MTV and RealNetworks announced on Tuesday that they will be merging their online digital music services in an attempt to better compete with Apple. Verizon is the third member of a new venture, Rhapsody America.

Verizon was named as the third team member to "create a single, integrated digital music experience that consumers can access via their PC, portable music device or mobile phone," RealNetworks said.

The new company will be called Rhapsody America.

"Today’s announcements represent a sea-change in the digital music market," said Rob Glaser, chairman and CEO, RealNetworks. "By partnering with MTV Networks, home of the most storied brands in music history, and the market’s leading wireless company, Verizon Wireless, we’ll make Rhapsody the premier digital music service that delivers great music to millions of consumers whenever and wherever they want."

Mr. Glaser has made similar pronouncements in the past.

The customer experience was described: "Starting today, URGE customers can use their existing usernames and passwords to log in to Rhapsody and enjoy access to both services. In addition, Rhapsody customers can get their first taste of MTV Networks’ rich programming from MTV, VH1 and CMT.

"Verizon Wireless customers can already download music instantly to their V CAST-enabled phones at any time and from anywhere in the V CAST service area and transfer digital music to their phones from their PC. In the months ahead, Verizon Wireless will roll out functionality that sends the duplicate copy of songs purchased over the air directly to a customer’s Rhapsody account. The service will also allow transfer of subscription music from a Rhapsody account to a mobile phone."

According to the Wall Street Journal on Tuesday [Subscription Required], this move could spell the end of the Urge partnership with Microsoft. Apparently, Microsoft, consumed with its own Zune business, has failed to invest an a significant way in the Urge project after it launched.

The new partnership is seen by some as an admission that a fractured online music market cannot compete with Apple and iTunes. By bringing together MTV, RealNetworks, and Verizon, the trio hopes to better compete in the market so far dominated by Apple. However, the customer experience and format compatibility with the iPod, in a market still dominated by Apple and iTunes, will remain a key challenge for Rhapsody America.