Can Vitaminwater Help MySpace Music Make Some Money?

Coca-Cola Brand Offers Free Downloads From Fledgling News Corp. Service

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NEW YORK ( -- MySpace Music hasn't yet saved the digital-music business, and it's a long way from adding to parent News Corp.'s bottom line, but the service is getting a big lift from Vitaminwater this summer. The Coca-Cola brand is making MySpace Music the centerpiece of a summer campaign for a new flavor, Sync.

Vitaminwater's MySpace Music page
Vitaminwater's MySpace Music page
The beverage maker is shipping 24 million bottles of Sync stamped with the MySpace logo. Under-the-cap codes can be redeemed for a free MP3 download via MySpace through its partnership with Amazon. Vitaminwater is paying for the downloads and supporting the campaign with magazine, radio and in-store advertising featuring stars Carrie Underwood, Alicia Keys and 50 Cent. The tagline for Sync: "Download of vitamins and antioxidants." The campaign, which kicked off this month, extends until July 31.

Sync is one of Vitaminwater's biggest flavor introductions, as well as the first time it has co-branded a launch with another consumer-products company. Already, sales of the flavor, which hit shelves in the past few weeks, have put it among the company's top performers.

"We're linking up with MySpace to give something back to our loyal users," said Eric Berniker, senior VP-marketing at Vitaminwater. "In this economy, anything free is appreciated."

Two big challenges
Vitamninwater is not the first brand to sign on with MySpace Music -- Toyota has been offering free MP3 downloads on "Toyota Tuesdays" through the service -- but it is the largest brand since former MTV exec Courtney Holt took the reins as president in January. The deal addresses two of MySpace Music's biggest challenges: boosting ad revenue and encouraging the service's many users to actually buy things such as music, merchandise or concert tickets through the site.

"We think this will show the ease of use of the site," Mr. Holt said. "There are buy buttons next to every stream of music. We think boosting conversions is really important for our business."

So do record labels, which took stakes in MySpace Music last fall and came in with high expectations for how the social portal could use its strength in music to drive digital sales. So far, MySpace Music has had a lot of success attracting users -- 20 million unique visitors in March grew to 27 million in April, according to ComScore. But they're not buying much, which has annoyed the labels.

"Without putting too fine a point on it, it has disappointed us so far," said Warner Music Group CEO Edgar Bronfman on an earnings call last week. "MySpace Music has been slow to create monetization tools and to be able to impact in a revenue-generating way the massive audience that they have been able to attract, and that needs to change, quite frankly."

As shareholders in MySpace Music, the labels have something to gain from all of its revenue streams, whether it's advertising, digital-music sales, T-shirts or concert tickets. But all the other revenue streams pale compared with download sales, which is why the labels want MySpace to convert its vast audience into buyers. Mr. Holt said he has "high expectations" for the campaign.

Like Pepsi's iTunes sponsorship
The campaign has the potential to boost the nascent service in the same way Pepsi's sponsorship of free downloads helped build awareness for Apple's iTunes in its early days. The number of bottles coming into the market is higher than the number of unique visitors to MySpace Music in March.

Still, the Pepsi-iTunes promotion in 2004 resulted in only about 5 million downloads out of a possible 100 million downloads, Apple said at the time. Both Mr. Holt and Mr. Berniker declined to comment on the number of downloads they hope will be redeemed.

Even a small boost would be welcomed by the fledgling site. Costs associated with MySpace Music contributed to an $89 million loss last quarter for Fox Interactive Media, a division of News Corp. MySpace is also getting another ad-supported competitor in the form of Vevo, a joint venture between Google's YouTube and Universal Music Group.

"We love seeing our brand associated with [Vitaminwater] and seeing MySpace extended into other media outlets. It's driving awareness of our network," Mr. Holt said. "We're hoping other brands will see this as a place to do collaborative, integrated business. This exemplifies what we can do vs. what other media companies can do."

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