MySpace Launches Music Service

With 5 Million Member Bands, Company Could Transform Recording Industry

By Published on .

NEW YORK (AdAge.com) -- MySpace, a site that has always been closely associated with music, is launching an ad-friendly iTunes competitor.
MySpace Music will include ad-supported audio and video streaming, a digital music service, mobile content solutions and original programming according to MySpace COO Amit Kapur.
MySpace Music will include ad-supported audio and video streaming, a digital music service, mobile content solutions and original programming according to MySpace COO Amit Kapur.

An offshoot of the social-networking giant, MySpace Music is launching in partnership with Universal Music Group, Sony BMG and Warner Music Group. It has hired a completely separate staff for the site and hopes to capitalize on the estimated 5 million bands and 30 million unique monthly visitors to MySpace music pages.

Shared experience
MySpace chief Operating Officer Amit Kapur said new features will include ad-supported audio and video streaming, a digital music service, mobile content solutions and original programming from artists and their labels. Users will be able to download files free of DRM (for digital rights management) and share and customize their music experience.

"With ad-supported content, and marketing event sponsorships, ringtones and e-commerce services like merchandizing and ticketing," Mr. Kapur said, MySpace "goes from a promotional vehicle to a commercial vehicle."

Unlike other ad-supported music services such as Napster and Spiral Frog, which have struggled, MySpace is counting on a wide swath of revenue: sales of merchandise, ticketing, ringtones, advertising and sponsorships. Another big difference, CEO Chris DeWolfe said, is that the company has "been around for four years, and we pride ourselves on our advertising space and ad space technology. ... We have multiple sponsorships with music and sold sponsorships there [and] we have hundreds of people devoted to sales and [the development of] sales technology."

And if the scope of the new site wasn't clear enough during a conference call detailing the announcement, MySpace execs liberally dropped phrases "360-degree experience" and "360-degree platform" just to be clear.

Community comes first
MySpace execs declined to discuss specific terms and conditions of the site's partnerships with the record companies, but they did emphasize the community aspect of the site.

"MySpace will always be a community first, and a music space second," Mr. DeWolfe said. "This has been about creating a product that our users have asked for. We believe it's the perfect time to create this venture [and we] feel it's about giving up control and taking it to the people and letting them define their own music experience."

The most obvious competitor for MySpace Music is Apple's iTunes, which has dominated the music-downloading landscape in the recent past. MySpace remained vague when asked how much individual song and album downloads would cost users, only saying the prices are "going to be very competitive."

James McQuivey, a digital music analyst for Forrester, doubts that MySpace will offer Apple much real competition -- at first, anyway.

"Apple will not be affected for the first few years, because Apple's iTunes store lives on the strength of Apple's devices," Mr. McQuivey said. "One implication of this is that Apple may decide to improve its store experience, but I don't honestly see it trying to compete as a social network. Instead, it will do what it does best: making expensive devices people love."

Music industry evolves
But Mr. McQuivey sees this venture as a visionary, and necessary, move for the music industry to embrace online usage.

"A MySpace music store is exactly the right step to get the music industry to the next level," Mr. McQuivey said, "because it recognizes that consumers don't just buy music, they experience it, which is a much larger concept -- they share, they discover, they heckle, they even use it to provide self-identify. That's what people do with music already on MySpace. If MySpace and the music labels do it correctly, he said, "Consumers will be able to touch on every aspect of their music experience in one place."

MySpace has offices in 28 countries worldwide; while the music service will originally be offered in the U.S. only, it'll eventually expand overseas.
In this article:
Most Popular