Published:
25-Sep-08
The revamped music service from one of world's largest social networks MySpace has launched in the US. Apart from redesign of the MySpace Music Homepage, the following changes and features were introduced:
• Full-length streaming cap removed: artists are no longer limited to six full-length tracks and can make their entire catalogues available for full-length streaming
• Integration with 'Friend Updates': when new music is added to a member's (private user or band) profile, it becomes available for full-length streaming on their friends social network news feeds
• Partnership with Amazon and Jamster: links are provided for purchasing to MP3 and ringtones on these sites respectively
Some of the features mentioned in previous announcements (such as playlist syndication to other platforms, recommendation engine, or partnership with ticketing and merchandise retailers) have not been made available at launch.
The relaunched service is no longer managed by the social network, but by a joint venture between MySpace and major labels. The JV was formed in April this year with three of the four major music labels – Sony BMG, Warner Music Group (WMG) and Universal Music Group (UMG). The fourth Major – EMI – took the stake in the venture several hours before the service launch. Due to the lateness of this deal EMI catalogue has not yet been made available on MySpace Music. Although the financial details of the JV are scarce, some sources suggest that the initial cash injection of $120m from the majority stake-holder News Corp. (the corporate parent of MySpace). The conditions of the JV stipulate waving of licensing fees and an advertising revenue share agreement with payments to labels to be distributed according to the stake in the JV. MySpace Music also licensed catalogues of independent label content distributors The Orchard, ADA, Red, Fontana, and Caroline, who will be paid royalties based on playback statistics.
Expansion of service to other countries is expected with UK rumoured to be the next country to where the new MySpace Music will be made available.
Our take...
The relaunch of MySpace Music continues the trend towards ad-supported free to the end consumer online music business models. Unlike a number of its competitors, MySpace Music has the advantage of unlimited free on-demand streams: for example, Rhapsody and Facebook application iLike powered by it allow 25 free full-length streams a month, while Last.fm limits on-demand streaming to 3 times per song. JV with Major labels also gives a certain advantage to MySpace Music: major label content licensing and royalty rates have until recently been hard to negotiate, although the new licensing scheme for online streaming and rental services unveiled earlier this week by rights holders representatives (including RIAA) should simplify the process.
However, while the service has the potential to generate significant traffic, monetization of it will prove a challenge given the low CPM rates associated with both music and social networks. The company seems to be addressing the issue with enhanced brand promotion features available for advertisers such as possibility to create 'branded' playlists which users can import into their profiles, or to give away music downloads, which is what McDonalds, one of advertisers at launch, opted for.
USA,
