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Warner Music regrets MySpace Music deal

15 April 2009 11:14 by James "Dela" Delahunty | 7 comments

The MySpace Music project is only 6 months old, and it's 75 million or so users are streaming literally billions of songs per month. Under any normal regular deal with the record labels, a price would be set per stream that would have to be paid to the label. This is what you would think is in place at MySpace Music, because it certainly is at many other online audio services.

However, sources have told TechCrunch that Warner Music Group has been making some noise about the deal they struck with MySpace Music. It would appear that the deal does not have any pay-per-stream agreement setup. Instead, WMG gets a share of the advertising that is displayed when a user streams its songs.

That advertising revenue is not turning out to be as good as was initially expected, and now WMG is getting angry about the widespread use of its content on the site and the low revenue it is receiving for it. It has indicated that when the current deal is up, it will seek a new agreement with MySpace Music or pull its music from the service completely.

The fact that advertising is doing worse than was expected might signal that MySpace Music is not doing very well at all. It already has some measures in place to cut costs, such as a prompt after playing four songs that asks a user if they are still there. If the service is a financial hole for MySpace, there is only so long it will go on before they decide to drop it.

Permalink to this article | Topics: MP3 & Digital Audio Online music services

Hulu, MySpace to work on video service (22 September 2009)

Warner Music reports 17% revenue drop in second quarter (7 May 2009)

MySpace Music searches for new revenue streams (19 April 2009)

SpiralFrog kicks the bucket (21 March 2009)

MySpace testing mobile video streaming service (4 December 2008)

MySpace developing portable media player? (7 November 2008)

MySpace adds more indie distributors (26 October 2008)

MySpace Music finally launches (26 September 2008)

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Discuss this article!
rosedog (Member) 15 April 2009 11:55
WWWWWWWWHhhhhhhhhhhhhaaaaaaaaaaaaaaaaaa!!!!!!!!!!......... Greedy bstrds [ + quote]
maddog68 (Newbie) 15 April 2009 13:52
Do they want some cheese with that whine. They shouldn't be so greedy. [ + quote]
beanos66 (Junior Member) 15 April 2009 14:28
how many times have artists gone to their labels and said "I should be getting more royalties than this"? Ha! is what I say [ + quote]
imnomyth (Junior Member) 15 April 2009 16:18
How about this...artists/publishers get paid only for concerts and album sales/downloads. This will be a high percentage for the artist of course, but the radio and other sources that use their music should just be considered as an advertisement towards their sales. SCREW these endless royalties!!! [ + quote]
5fdpfan (Junior Member) 15 April 2009 16:35
"It has indicated that when the current deal is up, it will seek a new agreement with MySpace Music or pull its music from the service completely" Great stragegy Warner. Play hardball with Myspace, who themselves are saying they're not seeing much return on the deal either and see what that gets you. NO DEAL AT ALL! Yeah, charge myspace more for a service that's already unprofitable. And just how is that supposed to improve things any for them? NIcely for the labels maybe but it has to work to the benefit of both sides, not just one. It's the label's fault that this is even an issue in the first place. IF the greedy f%%%s wouldn't charge everyone a king's ransom to license their music for things both legitimate, but mostly absurd, this wouldn't be happening The artists ultimately are the ones who, until they decide to go on their own or to a smaller label, are and will continue to suffer the most from this petty squabbles. 99 cent songs are too cheap and apparently teh millions of folks who listen to and know about their favorite bands on a daily basis doesn't amount to enough profit either. Too friggin bad! Be happy with what you make(and steal from your artists)and shut the heck up or continue hopelessly wasting thousands on lawyers to sue the "pirates". It's up to you. [ + quote] This message has been edited since posting. Last time this message was edited on 15 April 2009 16:38
bomber991 (Junior Member) 15 April 2009 20:06
I wonder how much money they expected to make? They probably get like 5 to 10 cents every time someone clicks on an advertisement. And then how many people have to look at an ad before it gets clicked on? I'd say probably for every 1,000 views there's 1 click. So WMG is probably getting pissed off that they're only making 5 to 10 cents for every 1,000 song plays. Now I don't know what kind of royalty rates there are for other services like radioplay, but I'm guessing it's higher than that. [ + quote]
kikzm33z (Senior Member) 15 April 2009 21:03
Not too surprised. Warner Music Group is definitely hated by the majority of YouTube users, now they're doing this crap with MySpace? Wow. [ + quote]