James Delahunty
19 Apr 2009 10:15
MySpace Music is only about half a year old, and at the moment it is simply just another location among many where users can listen to music for free. Recent announcements, such as the new Vevo site being developed by Universal and YouTube, show the continued trend of services hooking up with record labels to provide free music streaming.
After MySpace launched back in 2004, Courtney Holt, then of Interscope Geffen A&M, saw the potential it could have for music promotion and encouraged artists such as Nine Inch Nails, Weezer and The Black Eyed Peas to use MySpace to their advantage to connect with fans. "The artists loved it and it created a Pied Piper effect for the fans," Holt said.
Holt took charge of the recently revamped MySpace Music service, and is striving to build upon it to transform it into something unique, and not just another music service. MySpace Music is vital to fending off Facebook, which has overtaken MySpace in terms of global users, but not as the biggest social networking site in the U.S. just yet, and definitely not in revenues.
MySpace Music overhauled its front page to promote album releases and tours, and added links to song streams to Amazon's music downloads, for which MySpace will now receive a cut when a user clicks through and purchases a song. The service is also looking for ways to build revenue from advertisements.
Holt is now turning attention away from the music, and hopes to establish MySpace as a major seller of concert tickets and merchandise as well. The site's infrastructure is being altered for improved targeting of songs to users, and will target ring tones and new artists and more as well.
Of course, record labels are watching Holt's MySpace efforts closely, as they see music downloads rise but not nearly to a point of recovering lost revenue from falling CD sales. "MySpace's objective will be to find half a dozen new revenue streams," said Rio Caraeff, executive vice president of Universal Music Group's digital strategy unit. "We'd rather have 10 healthy revenue streams than one big revenue stream prone to disruption."
Holt seems to have a strategy to make MySpace Music much more competitive, but has so far being doing damage control by responding to users' complaints (such as the recent change that removed the caps on playlist creation, or the player improvement to cut down on sluggishness) also has the weight of Rupert Murdoch's News Corp. on his shoulders.
Additionally, advertisers are slowly realizing that social networking sites are not the best places for advertisements, and while social network advertising is still growing, the growth is declining.