MySpace Moves Into E-commerce

Music Store Called a Logical Next Step for Social-Networking Site

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NEW YORK ( -- The decision by MySpace to add a music store -- and test its e-commerce legs -- has analysts and industry watchers asking one question: What took so long?
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One analyst has called the MySpace music store a 'no-brainer.' faux hr
The new feature lets the site's independent and signed musicians sell their work directly from their MySpace profile pages, and it is being supported by a relationship with Snocap, a copyright-services company co-founded by Napster creator Shawn Fanning.

Launching pad for local
MySpace now hosts more than 106 million profiles, including roughly 3 million musical acts that post tracks online. By allowing users to self-publish, MySpace has become a launching pad for small local acts, as well as a place where national movies and artists can be promoted.

As long as songs for sale do not violate a copyright, artists and labels can set their own price and let MySpace members buy songs the way they would on iTunes. The service is in trial and will be available broadly by the end of the year.

Gartner analyst Mike McGuire said the move is a natural next step for MySpace. "It's kind of a no-brainer," he remarked.

A first step
It is a first step into e-commerce for MySpace, which until now has relied on ads and sponsor partnerships to generate revenue. Also, Fox Interactive parent News Corp. recently struck a $900 million deal with Google to provide search on sites like MySpace. That deal is likely to generate far more revenue that any e-commerce deal in the near term.

"By introducing a powerful commercial tool set into the industry, we expect to see artists translate their community reach into sales," said Chris DeWolfe, CEO and co-founder of MySpace.

The songs, which initially will be bought through credit card or PayPal accounts, will be delivered in an MP3 format. That is compatible with most digital-music players, including the popular Apple iPod. The new online music store is likely to appeal to many unsigned artists, but its appeal to labels is questionable because the music store will not attach files that restrict how the downloaded songs can be used.

Napster connection
Snocap, a 4-year-old San Francisco company that manages a registry of copyrighted music, will operate the software behind the online music service. Snocap was co-founded by Mr. Fanning, known best for launching the Napster file-sharing program in 1999, sparking years of controversy over the fair use of copyrighted music.

Last week, Universal Music Group and SpiralFrog announced they will make UMG's catalog available for free so long as consumers are willing to sit through a host of ads.
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