Myspace Music: The Good, The Bad, The Ugly

A recent music industry blog article caught my attention the other day. It is written by Dave Kusek, the Vice President for the Berklee School of Music, and it features his thoughts on the recent revamping of "Myspace Music". Without going too deep, essentially Kusek shuns the new addition to the site claiming that this new music section is just a copy of the existing social media sites, and has therefore lost sight of the indie artist. In his exact words, the new addition "falls short of the comprehensive one-stop online music store" that most people were expecting (par. 5). In order to paint a more complete picture, I am attempting to build upon his remarks, and by offering my own insight into the matter, ideally provide some sage advice for the music industry gurus out there.

Kusek's discussion overlooks a key fact that is important to this discussion - the fact that Myspace is a corporation; one which essentially makes its money though advertising. Since its inception, Myspace has been focused on one goal: get as many users as possible and then hit them with advertising. Trent Lapinski, a blogger and internet "techie" discusses this point in his article The Business of Spam 2.0. He states that Myspace (since its beginnings), was a "site created by a marketing company known for viral entertainment websites, pop-up advertising, spam, spyware, and adware", utilizing clever marketing tactics to give it a friendly, so-called indie feel (par. 2). Most people can plainly see through that friendly facade, however, especially considering the fact that Myspace has always been a free service. The notion that its creators ever cared for more than anything than advertising dollars is absurd, with the music portion being one of the most clever marketing tactics used to cover up that fact. Consequently, while the site did have an indie feel to it and appeared to appeal to the upcoming/indie artist, that perception was always entirely overshadowed by advertising. Now, with the addition of the new, revived music section, Myspace is further bolstering its ad revenue by allowing for the hottest and biggest artists to be featured on the site. It is easy to see how one of the best ways to gain advertising revenue is to have the biggest/hottest artist as a part of your media, (much like how TV network affiliates pay a license to use the hotter network TV shows to generate greater revenue for themselves).

Kusek also purports that the new music section merely copies the other existing sites such as Imeem, Last.fm, and a host of other music and social media sites (par. 7). Is it to their disadvantage? Probably not - the added advertising revenue created as a result of having access to the four major labels' content will be realized in a way that meets all prior expectations. Om Malik, founder and senior writer of Gigaom.com, recently stated in this article that -according to Myspace CEO Chris DeWolfe - Myspace is not trying to establish itself as an online retailer because there is really no point in competing with iTunes (par. 2-3). In essence, Myspace is establishing itself as a social-networking site that allows one to search and discover new music and then go and buy it from Apple. In a way, its simply another marketing tactic on the part of the 4 major record labels who - according to Kusek - own a 40% share in the new venture (par. 12).

One might be asking, where is the entrepreneurial business opportunity in all of this? The answer is already in existence and it is called CD Baby. CD baby has been focusing on the independent and upcoming artist for years now, and has been hugely successful within that smaller, niche market. There exists only one shortcoming, however, and that is the fact that there is no social-networking aspect to CD Baby. This is most likely a result of a conscious decision on the part of the owners and is therefore a key to their success as a highly differentiated online music retail site. That said, however, think about the possibilities if one were to create a site much like CD Baby, which also included a social-networking aspect, allowing for artist-to-fan interaction through email, message boards, and the like, all under the online music retailer umbrella. This would make it easy for upcoming artists to control their own interactions with fans, promote their own music, and then provide them with an easy method of purchasing their music. If you take CD Baby's already stellar track record and tack on a social-networking aspect, it is easy to see how one could make a healthy profit from sales commissions and advertising with the coupling of social-networking and online music retailer.