MySpace plans to launch ad-supported music service

by Nikki Sandison, Brand Republic 20-Feb-08, 09:05

LONDON - MySpace is planning to launch an ad-supported free-to-listen online music service and is said to have been in talks with the four major record labels.

The service, which may be called MySpace Music, would allow consumers to listen to music for free on their computers. It is expected to be structured as a joint venture between MySpace and the participating labels, including Universal Music, Sony BMG, Warner Music and EMI.

One obstacle that MySpace faces is that it is yet to resolve an outstanding lawsuit filed by Universal Music in November 2006.

The company accused the News Corporation-owned social networking site of copyright theft for allowing users to post its artists' songs and videos on their home pages without permission.

MySpace would not be the first to try to build an advertising-supported music service, with companies including Qtrax and Spiral Frog already seeking deals with the majors. Qtrax recently announced it had signed up major labels only to have them deny they were involved.

Record companies have shown some interest because of the licensing fees they pay but so far the results have been mixed.

The edge that MySpace has over other services is its size, with over 110m users.

The service is likely to include both free streaming music and paid MP3 downloads, which can be played on most portable devices, including Apple's iPod.

If successful the music service would help MySpace to position itself as a media company, rather than just a social networking site, and to distinguish it from faster-growing competitors such as Facebook.

Comments

Bill Houghton - 21/02/2008

Lets be clear about one thing… these companies are not offering free music. They’re offering free on-demand radio. There’s a big distinction. First – There are already niche players like last.fm and Pandora, but music streamed from a website is not very compelling if I can’t take it with me, or play it throughout my home. Second – MySpace can’t even sell it’s existing ad inventory. They have trillions of ad impressions, and no ability to monetize them. It’s doubtful they’ll be able to use their current ad model to support even more services – especially one with such high overhead as free Music. Read the excellent analysis of MySpace’s ad-supported music fiasco at http://www.BroodingSavage.com.