MySpace controls 67.5% of the social networking marketplace in the U.S. (Hitwise). Thursday, the News Corp owned company moved to strengthen its position with the launch of a sweeping new music service.
First announced in April, the service is a joint venture built with the participation of all four of the major music labels (Sony BMG, Universal, Warner Music and late entry to the partnership, EMI). It offers free, on-demand, ad-supported streamed songs from a massive musical catalog. Listeners are able to pick and choose what they want to hear, when they want to hear it. To encourage sharing and interaction, they can also create and share an unlimited number of playlists, each compiled with up to one hundred songs. The service is live now.
For listeners interested in buying what they’ve just heard, ala carte purchases are powered through a smooth integration to Amazon’s MP3 store. All downloads are DRM-Free. (The partnership is Amazon’s second significant Mp3 announcement this week. They also announced they’ll power the mobile Mp3 store for T-Mobile and Google’s new Android powered G1 phone).
Revenue will be generated from the sale of visual ads to be shown on the “player” or sponsored “skins” that redecorate parts of the page. McDonald’s, State Farm Insurance, Sony Pictures and Toyota have signed on as initial sponsors. Sony Pictures’ will be skinning all MySpace Music users’ profile playlists for an entire week with branding from their upcoming film “Nick & Norah’s Infinite Playlist.” Toyota will offer free music downloads and have a strong presence on MySpace Music’s Personal Music Player every Tuesday for a year in a promotion branded “Toyota Tuesdays.” (It’s probably no accident that it matches against Apple’s claimed “iTunes Tuesday” practices).
The Wall Street Journal reports MySpace is intentionally limiting the number of ad slots to inflate their rate card.
Record companies will share in the ad revenue.
Though not available at launch, eventually, the site will likely add tools and services to sell merchandise ranging from fan-wear (t-shirts and souvenirs) to concert tickets.
From the first announcement, high hopes have been vested in the offering. Warner Music’s Chairman Edgar Bronfman jr. said early on that “this venture may provide a defining blueprint for this next important stage in the evolution of social media.”
There’s no question, the model has been cherry picked from the buffet of sales experiments tested by record companies over the past few years. Like other online music services iMeem, Last.fm (CBS) or Pandora, the social aspects of discovering, sharing and interacting with music are aimed to be front and center.
From the look of it, MySpace music aims to be part juke box and part soundtrack to our internet existence.
Explained MySpace co-founder and CEO Chris DeWolf, “The whole consumption patterns for both music and video have changed a great deal in the last five years. We wanted to put together a music service consistent with those changing patterns and layer a business model around it.”
It remains to be seen whether the offering will help break Apple’s grip on digital sales, or siphon traffic away from growing sites like iMeem. As a first pass, the service doesn’t jump out as a sure thing. Its navigation, search and layout are a little awkward. Compared to rivals, the user experience is cluttered and anything but “elegant.” The service is also tethered to a PC, though that’s true for rivals too. (Access to portables comes via download sales through Amazon and there’s no mobile crossover, for now).
For each flaw, however, there are counterpoints. User experience and interfaces can be improved. Computers are increasingly the hub of connected home entertainment and a centerpiece of daily working chores at the office. Many already use them to listen to music on a regular basis. And the lack of a mobile connection? All things in time.
Besides, the price point is a trump card. At free, it can’t be beat. It’s hard to not give the service at least a look, or even second look. It’s has positive promotional value for Amazon and the record companies.
Love it or hate it, for the music fan it’s full of potential.
And for the music industry? A marketplace struggling to find a viable revenue pipeline to replace one fast disappearing. Tens of millions of unique users a month, many already incorporating music into their online lives – that’s a ripe opportunity if they can get the revenue model to match their needs without offering a user experience that’s contrary to the customers’.
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