Anonymous Music Execs Confirm Details of MySpace's Upcoming Music Service
According to an AP news story that ran yesterday afternoon, the upcoming MySpace Music service is definitely happening. Based on reports from music executives, who spoke only under the condition of anonymity, News Corp. has approached the four major record labels to discuss the launch of a music service that would operate via the MySpace social networking site. The executives also confirmed earlier rumors about the nature of the services that would be offered - according to them, the service will offer free streaming music, mp3 downloads, and a subscription plan. Can we say iTunes killer?
The four major record companies approached, sometimes referred to as "the big four," are Universal Music, Sony BMG, Warner Music, and EMI. These four companies would receive an equity stake in the new company, according to one of the anonymous executives cited in the news item.
According to initial plans being discussed, the new company, which will likely go by the name "MySpace Music," will offer MySpace's 68.6 million U.S. visitors an ad-supported music player, which could be embedded on other web sites or blogs. It's possible that this player could be from Snocap, since they are already powering the MySpace Music services that currently exist. There is also talk of a partnership with Amazon, in which Amazon would build a white-label version of their mp3 music store for MySpace, offering DRM-free downloads of tunes.
Although the initial reaction to hearing this news prompts most people to immediately think iTunes killer (which very well may be true), a secondary victim would be streaming music services and web radio services, like the currently popular Last.FM. Similar to the way that a Walmart comes into a town and mom-and-pops go out of business, I can see a possible impact on the smaller, niche streaming radio services...how will they compete when MySpace will offer it all - the big names artists and the independent artists?
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It's also interesting to think why MySpace hasn't done this earlier, especially considering how popular it is with bands.
Posted by: Tan The Man | February 21, 2008 9:42 PM
now I see why myspace has been blocking imeem.com
imeem is already doing this - they've got a 'youtube for music' site where you can listen to almost any piece of music ever recorded. And myspace has made a point of blocking their very nice embeddable player that lets people share all this music on other web pages.
So, it's not so surprising any more that myspace hates them.
Posted by: Richard G | February 21, 2008 10:40 PM
Big problems abound for this one: For one, if in fact the labels are looking to Myspace to sell all advertising, and provide the streaming and syndication platform, they’re doing it oblivious to the fact that they already went down this path with Apple, and that got messy. Why is that? Because Apple, like Fox is a for-profit organization with its own shareholders and its own independent reasons for choosing a strategic direction. In Apple’s case, they sucked up to the labels for 8 years to build catalog and win market share and overnight became more powerful than the labels themselves. This paradigm is sure to repeat itself if the labels give similar control to Fox and Murdoch.
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Posted by: Jordan Garbis | February 22, 2008 5:21 AM
Jordan - but Apple only have that power because they are the dominant player. Introduce 2 or 3 major players - say mySpace and Amazon - and the balance of power becomes vastly different. The choice before for Warners was to either be on iTMS OR send people back to p2p.
Now the threat can be to move exclusively to Amazon - and Amazon and emusic are going a long way to make their store clients work easily with iTunes (or indeed the consumers choice of music library software).
If the prices start to vary too, then consumers will quickly get used to the idea of shopping around for the best price.
[Although I am intrigued as to what will happen when someone tries to set up a second hand MP3 store. Presumably as purchased goods you should be able to transfer ownership in the same way as you can with software].
The big question is whether mySpace can actually make the shopping experience as easy as iTMS. mySpace has certainly improved since Facebook exploded but it still sucks in terms of design. If it's actually easier for me to open iTunes and search/purchase a song there than go through the usual hoops it takes to perform any action on mySpace, then that is what people will do. Hopefully Amazon will save them from their worst instincts.
I think there is still room for players like last.fm, MOG, ilike if they market themselves heavily on their USP - which is music discovery - and to then monetise that through closer links with, say, the Amazon store. Now music discovery is only a niche (the mainstream market is still happy to 'discover' music through broadcast rather than narrowcast channels) but it's a significant niche - and equally important it's one of high music consumers.
Posted by: JulesLt | February 22, 2008 5:58 AM
On demand music is not a very compelling proposition for a lot of reasons. Rhapsody is the largest player in the space, and they’re not having great success. Their 2007 numbers show almost flat growth despite the merger with MTV, and additional distribution relationships.
No matter what the product looks like, it's still uncertain MySpace can monetize it effectively. The reason is mostly because there’s little demand for advertising on MySpace. Advertisers are shy about appearing in the pages next to content that is often inflammatory, inappropriate, or just plain stupid. Add to that the enormous glut of inventory (2.4 trillion impressions!) and the net result is lots of traffic that can’t be monetized.
Adding music will only create additional inventory and traffic that can't be monetized. In the end, MySpace will end up eating the cost of the music licenses.
Read the excellent analysis at http://www.BroodingSavage.com
Posted by: BILL | February 24, 2008 7:44 AM