Facebook is now the largest social network in the world. But they continue to trail MySpace by a massive 36 million users in the U.S., and at current growth rates it will take them 18 years to overtake them.
Most of Facebook’s growth is international, where they’ve executed on a brilliant strategy for quickly rolling out localized versions of sites by getting their users to do the translation work for them (MySpace, by contrast, expands via a command-and-control infrastructure that puts people on the ground in each new international market). But the commercial value of some of those international users is far less than the U.S., the UK, Japan and a handful of other countries with robust online advertising markets.
Is Music Perpetuating MySpace’s Lead In The U.S.?
Music is MySpace’s territory. They host millions of artist and band pages, and one of the first things any new band does is create their MySpace page. MySpace says 35 million people per month visit their music sites, including MySpace Music and various artist pages. Some artists have millions of “friends” and the pages allow streaming music, artist control over the look and feel of the site, etc.
Facebook, by contrast, has no real internal music strategy. Artists can set up Pages to promote themselves, but the pages are no different to any other fan pages (for example, no streaming music) – there is nothing music or artist specific on the site.
Next month MySpace is rolling out a new music joint venture with the major labels that will have music streaming, playlists, downloads, merchandise sales, ring tones and other features. It’s not only likely to be a major destination site for music but also a significant revenue driver for MySpace and the labels (a little may trickle down to the artists as well).
Music is a huge part of what drove historical MySpace growth, and I believe it is a major factor in perpetuating their lead over Facebook in the U.S. market.
Facebook’s Response To MySpace Music: iLike
Facebook doesn’t appear to be engaging in any direct music strategy at all. Instead, they’ve placed their bet on iLike, a third party application that has no streaming deal (they piggyback on Rhapsody). Last month Facebook announced that they’ll give iLike special access to Facebook through their new Great Apps program. All official and most off record messaging we’re hearing is that iLike is Facebook’s music partner for the long run.
We’re big fans of iLike. But Music is such a big category that is so completely dominated by MySpace, that it seems like they should have their overall music strategy under their direct control. Today, Facebook users who want to stream music must do so via a contractual maze that goes from the labels to Rhapsody to iLike to Facebook. Meanwhile I can’t visit a MySpace page without being attacked with streaming music.
At its core Facebook is still a generic social network that, through the social graph, provides an easy way to connect with friends. MySpace by contrast has the social graph as well as a huge footprint in the music world. That not only provides a reason to go to the site, but provides a nice business model as well.
Instead of trying to get into MySpace’s music pie, wouldn’t it make more sense for Facebook (and other competing networks) to focus on what differentiates them from MySpace and bid on their somewhat different type of audience and usage? Else with end up with a load of different networks that are ultimately equally bad…
Its true that they compete in the US Markets but the important Asian market is what needs to be tapped for them to succeed.
Did you miss this part:
“But the commercial value of some of those international users is far less than the U.S., the UK, Japan and a handful of other countries with robust online advertising markets.”
It is exactly the Asian market that has very little commercial value. In 5 or 10 years, sure, but not now.
“It’s not only likely to be a major destination site for music but also a significant revenue driver for MySpace and the labels (a little may trickle down to the artists as well).”
Just wondering if anyone else has a problem with the above…
Somewhat. Techcrunch has said time and time again that they want to see the demise of labels. So any chance to take a dig is taken.
I see this as a significant revenue driver for MySpace. That’s it. Fans are picking what they want to buy and are less likely to be force fed unbelievable garbage. So whether or not the song is available on MySpace or on iTunes, they will buy it if they want it. I don’t expect to see a large jump in revenue.
Where the “revenue” for the artists will come from is in the song STREAMS. These streams pay a fraction of a penny each… so your small artists will see….. maybe a dollar every month?
Myspace has more not-logged-in users, so more visitors come from web search, dont get mislead. But to veiw facebook profiles one has to log in, if not pages. So almost all unique users to facebook are logged in users who maintain profiles. And people like to hide their profile from search engines for privacy.
Maybe now facebook pages can be added with apps, it may or may not take on myspace. But facebook is more gud to make friends and keep, thats for gud. When elderly people start making their profiles in facebook then it would catch up with myspace.
Actually, Facebook has a brilliant SEO strategy and has been working very hard to get public pages into Google. Just take a look. A lot of their traffic comes from SEO, not-logged in users also.
Google says:
site:myspace.com
Results 1 – 10 of about 216,000,000 from myspace.com
site:facebook.com
Results 1 – 10 of about 128,000,000 from facebook.com
Their SEO strategy can’t be *too* brilliant, but I guess strategy implies a plan and not actual results.
Wonder what percentage of their users have BOTH a Facebook and MySpace accounts.
The real users would be those who chose to only have one, then focus all their energies into building it to the max
Comscore can tell you that. In the US, 30% of all MySpace users have a Facebook account. On the other side, a whopping 60% of Facebook users have MySpace.
Besides MySpace being annoying to the senses and being full of people that just want to see how many friends they can get, I seem to lose internet access a lot when I go to their website, from various networks, no matter where I am. I haven’t noticed this with any other website (and I browse a lot).
Do others experience this also, or does this just happen with my computer?
And of course the main point here, that this post touches on in more detail, is the fact that FB probably will see very little revenue (if any from iLike)
http://www.dram...ny-comparisons/
Suddenly that $15 bn valuation is so obvious.
Interesting perspective. Music is a common denominator to the masses. Facebook could end up being exactly what it started out to be.
this is also a good reminder about how huge myspace is.
Too many VCs and entrepreneurs forget about myspace and only think about FB…
I Have both accounts, but if the fact that I have ICQ tells you anything, it may not matter hahaha…..
http://tech4000.blogspot.com
There is plenty of room in the music space yet. I don’t like MySpace’s approach to promoting relative content, as in delivering targeted content based on coordinates (geocoding). It’s a dumping ground. I’ve got a music platform established that does this, and it has been doing very well here in the Midwest. It is slowly creeping out to other areas of the country as well.
http://www.madtownlounge.com
The last I heard from Melody at ascap (yes that’s her real name) is that facebook doesn’t have a deal with ascap. If they did, music would flow freely on facebook pages, and the labels would stand to the side, while facebook radio stations bloomed, and paid the toll.
Ascap has it covered for single plays or streaming content. There are workarounds today, nudge nudge wink wink, but the bottom line is that media co.’s artist fan sites on facebook suck. They are promo pages. Anyways facebook users being a fan of page is almost equivalent to a 1 time page view, as the stats show % of recurring visits is very very very low. That may change with tunes to listen to.
You mean ASCAP/BMI/SESAC/whoever else feels like extorting you. 95% of their money does not go to who deserves it.
Check out http://apps.new...om/faceitspace/
New app, lets bands promote themselves with “magnets” and upload songs for their fans to check out; fans can have an application tab on their page.
Much more like MySpace as an application tab within Facebook: users can organize their content which includes music that plays when people hover over various magnets.
what’s so “BRILLIANT” about facebook’s international strategy when they let one of the largest markets, Germany, be dominated by studiVZ ??
I agree with the article that Facebook’s international strategy – getting other people FROM THE COUNTRIES THEMSELVES to do the translation – is brilliant. They solve two problems with one solution – the high cost of breaking into new markets, and the issue of getting good localized translations. Whether Facebook is first or 10th in a market isn’t the point – the point is that they will soon be IN all those markets…and will have a chance to compete.
Well Facebook needs to look Reble (www.reble.fm). Reble addresses the music segment with the peers and friends connectivity model linked to it and has a very strong viral aspects to it, which has strong business linked to advertisements. The company is quite early and hence they will be a good player to work closely with Facebook if the right kind of interest become mutually beneficial.
The senior product management and engineering team should seriously look at Reble.
Thx
sganguly@yahoo.com
i like your blog… nice gitu…. he..he…
Currently myspace is completely ignoring a large portion of the world’s populous, Asian markets need to be exploited, you have countries such as India, Malaysia, Pakistan, China, Japan etc with large populations which are all using Facebook instead of myspace.. so yeah.. in order for Myspace to suceed they should start thinking about investing in foreign markets…
Have a look:
http://www.myspace.cn/
You say that Facebook, by contrast, has no real internal music strategy. In reality it’s not true. You can easily find FB applications. Some of them have been described by:
amazingstartups.com and businesshackers.com
that’s an apps strategy, which is third party. My intention with the word “internal” was to illustrate that they don’t have their own strategy apart from that.
I have a hard time believing that MySpace will hold onto its music dominance for long, especially given that Facebook engineering and design is so incredibly better in just about every way imaginable. That said, they do need to improve the ways people can interact with bands.
As a musician and author of a music technology and marketing blog, I’m amazed that MySpace is still so popular, given how unpleasant the user experience is.
I wrote a humorous article about it here:
MySpace is a Trailer Park
Copying the strategy of a competitor instead of focusing on differentiation is not smart business strategy.
MySpace is mainly about music, Facebook is not. So why would you want to push Facebook to become more like MySpace? That’s like telling Apple to become more like Microsoft.
And again to the idiots, Facebook is and never was worth $15b, that is just media hype. MSFT also BOUGHT EXCLUSIVE ADVERTISING RIGHTS in the US with that investment – duh!
As for music on Facebook, I can add music to my profile with the Imeem app and there are apps to add music to fan pages. I wish it was easier since I manage pages for some musicians, but fan pages are only as good as the interaction with the fans anyway (music plays part of that).
Does Facebook need a music strategy? No
Will some app be created to make adding music easier? Yes
Do FB users WANT music blaring on their friend’s pages? No
I agree with Mr. David, both of them have their niche. In my opinion MySpace more trendy, teen oriented, flashy whereas FaceBook is more classy, clean, clutter free. I am pretty sure you wont find anyone who has both MySpace and FaceBook and rate them equally.
In my opinion FaceBook should clean up the Facebook app library, keep them open but define certain standards (u simply get lost in thousands of junk that is currently there) – engage business, corporates with the existing audience through value added story telling.
For instance I bought this good book from Amazon give me an option to publish my story (with permission) to my circle of people who have similar interests.
http://mydating...e.blogspot.com/
I remember just before Facebook Music was released there was lots of speculation around the form it was going to take. Facebook released music pages that weren’t differentiated from other pages. Why not have a universal player so I can easily listen while I waste time looking at friends profiles? Like chat, music could have been another adhesive to keep people on facebook for longer.
Also, if I were facebook I would have tracked the order in which people added pages. For instance I could have been the 5th person to become a fan of Wild Sweet Orange. This would have encouraged the adding of pages which have been slow to be adopted.
Mike, great article! I do have to respond to this part of your post:
“Today, Facebook users who want to stream music must do so via a contractual maze that goes from the labels to Rhapsody to iLike to Facebook. Meanwhile I can’t visit a MySpace page without being attacked with streaming music.”
That inaccurately implies that listening to music on Facebook via iLike is somehow more confusing or intimidating for the user. In reality, the only difference is “Autoplay.”
On Myspace, music autoplays, whereas on Facebook/iLike, the user needs to click a “play” button. Your point about being “assaulted” by music on Myspace clearly shows that you recognize this as a factor. The legal “maze” is not a factor that users perceive.
To enjoy music via iLike on Facebook, all the user needs to do is click the “play” button. They don’t need to register for anything (including for Facebook!), and they don’t need to have any idea where the contractual rights to the music are coming from. It just works seamlessly.
You can try it here. Like most pages on iLike, this page won’t require you to register for Facebook, let alone install or “log in” to the iLike app; and it is indexed by Google.
http://apps.fac...ilike/artist/u2
The other very relevant factor is that Facebook users are increasingly reticent to try out apps, due mainly to loss of trust because of the spammy and often deceptive behavior of apps that focus only on recruiting your friends. This issue, often called “app fatigue,” is a much more fundamental one for Facebook, and their recently-announced “tiered” program for giving certain apps more exposure is a step towards overcoming it.
regards,
Ali Partovi
CEO, iLike
You can disable autoplay, for like, two years now. “Our stuff has a play button” is an awesome strategy. Just face it that’s it too late to touch MySpace for social music.
Ali: Note my comment to this article as well as your Posting. Have a great day!!
They’re minuscule in comparison to MySpace, but I think purevolume and VIRB do a phenomenal job as well in the social space of the music scene:
http://www.purevolume.com/
http://virb.com/
MySpace traffic stats do not look right.
Total US internet users are about 220mil.
MySpace unique users are $70 mil.
This means about 1 our of 3 internet users steadily visits MySpace.
I do not have any empirical evidence, but that number does not look right.
MySpace might be popular, many people listen to music, but to say every third person visits it every day appears to be an exaggeration.
wait wait wait – did you say business model? this is spot on in terms of competitive advantage and creative class traction. myspace with music and editable U/I is far more engaging and sometimes totally overwhelming, but in comparison fb is sanitary.
Just thought I would give you a “HeadsUp” that guy over @ 1938Media is talkin smack about you again..The question is ..is it true??
Good post. The basic message is MySpace has a business model and a nice big media company in News Corp driving that model.
Facebook’s model is quite simply…”People are sheep and with enough marketing an PR we will get them into our site to provide their personal details.” And it worked…but now the strategy to sell out their user’s details and personal info with Beacon and such strategies is not paying off. And so you have Facebook 100% dependent on 3rd party apps, which make no money for either party and add no true service value to users.
MySpace wins here! Better long term strategy, a real business.
Facebook needs to sell, and sell quick, because once the fad fades and something new comes around, the “find your friends, play games and poke people” business model will fall like a deck of cards.
What is myspace’s commercial model though?
I don’t see any difference between fb and myspace in monetising their eyeballs aside myspace starting to play in the original content space. They both have a lot of users but neither can offer advertisers much cut through.
The issue they both face is agencies – creative/media etc – right now aren’t that willing to use them to advertise their clients wares.
And also remmeber, the eyeballs that are on myspace/fb are on other sites which often offer better environments. Neither channel is a ‘must buy’. There’s no shortage of eyeballs on the web and you can’t really build a business selling your inventory to remnant ad networks.
Facebook does provide fan pages for artists. On such a page, one can upload a song and users visiting said page can stream the songs.
There is an approval process when you upload a song – it isn’t made available to the public immediately.
You can see an example of this type of streaming audio on my band’s Facebook page: http://www.new....t37/25544885900.
I suppose it is a little app called ‘Music Player’ and it doesn’t appear to be associated with iLike.
So Facebook does have a bit of a music strategy that doesn’t necessarily depend on iLike – it is just not well known and probably not used that much.
Too bad Myspace is hate crime against HTML.
I can say that I’ve personally used MySpace to learn more about bands and music a lot over the past few years. I have hardly used Facebook’s iLike for this. I’m also well known by friends, colleagues and family to like MySpace more than Facebook and I feel that it is the better social networking Web site, in my opinion. So I may have a biased opinion towards MySpace.
Maybe this is because I have been a user of MySpace for a longer period of time but I have always enjoyed my MySpace experiences, whereas I get bored with Facebook quite easily. I also think that MySpace has a much better long term growth strategy but find it funny that both sites steal ideas from each other. To each his own, right? Does anyone else get bored with MySpace or Facebook?
http://kreuzer3...e-music-factor/
It still astounds me that so many people gravitate to MySpace. Yes, it remains a “must have” for any digisavvy indie band. But, seriously folks.
Every time I look at MySpace pages my brain (and usually my browser) threaten to shut down completely. Didn’t any of the 55 gagillion users get the memo that flashing GIF animations became annoying around 1998?? Didn’t the clean simple interface trend started Google seep into a single MySpace user’s head? Who in their right mind still puts sparkly “Thanks for the add!! XOXOX” comments on other people’s profiles?
After 5 minutes on MySpace, I want to run screaming into Google/Apple/Facebook’s arms to cry on their collectively clean and simple shoulders.
@riffic – I concur.
In response to “Facebook, by contrast, has no real internal music strategy. Artists can set up Pages to promote themselves, but the pages are no different to any other fan pages (for example, no streaming music) – there is nothing music or artist specific on the site.”
I believe Facebook has a Music player for artist to upload and play music on their Page (not profile page).
http://www.new....p;b=&ref=pd
Facebook also has a way for artists to display their previous albums as well:
http://www.new....p;b=&ref=pd
I’m not the only person in the world who thinks that FB is boring and MySpace has more interesting people on it. I suppose I use FB to keep in touch with people I already know, but I’ve “met” way more interesting people on MySpace from all over the world. FB seems very closed to me, insular, even cliquey, and has a purpose (keeping in touch) but MySpace is plain and simply more interesting. Yes a ton of the pimped out pages are an assault on my senses but still I find more characters on there and that to me is why it still rocks.
i think myspace WAS about music – years ago. Sure, they have a music strategy ready to execute – but if you ask me it’s 2+ years too late as now the music space is populated by a lot of innovative players and the users are more sophisticated.
In 04 it was the punk/emo scene which really embraced it … but the only reason now bands are on it is because the eyeballs are on it. Also, it gives bands a very easy way to set up a web presence which involves no coding knowledge and built in CRM/list management (however primative). That appealed to bands.
When these eyeballs start to migrate (which is happening in some markets) onto other platforms (like FB, lastfm etc) you will find the bands start following the eyeballs/ears elsewhere. The key to myspace is to redefine itself as a content provider across music, film, original entertainment, comedy etc whilst it still has a mass of users … this will give it the point of difference in the ad market it really needs to monetise as expected.
So whilst myspace was driven by its users from 04-08, the next 4 years the business needs to be driven by editorial/original content.
Whilst you seem to think you know what you are talking about, you do not. Myspace reigns king in the US and that is the major market for commercial activity.
I think a lot of you are missing the point.
MySpace wins. I make an artist profile, I upload my music and pictures. I promote it. That’s it.
From a user perspective, the player is right there at the top of the page. Big play button right there.
Facebook is not so intuitive and every artist is not also a geek or remotely interested in figuring out which Facebook app they have to install to share their music.
I even asked a few local artists if they had Facebook profiles and they told me Facebook is “boring”.
Just because MySpace allows users to put flashing crap on their profile, doesn’t make the service any less useful for people who like that sort of thing
Rasheen, I completely agree with your point here – it doesn’t matter if MySpace’s interface and ux are ugly, they have the musician’s love and devotion – AND PROMOTION. Which is key. I was at a music festival this summer and was shocked at how many people said “Go to my MySpace at…” instead of promoting their own direct URL. Bands are still using MySpace as part of their web strategy, and it’s completely accepted in that market.
It’s not the music component, it’s this ugly interface and constantly new ‘features’ that aren’t actually interesting to users (like the new facebook) that most users actually dislike. So without enthusiasm and recommendations to friends, membership is lower…
Like Mike, I enjoy iLike too. However, it’s losing its luster. What in the world is the CEO thinking? I guess you can’t get funding from Pittman and then expect to give your users too many freebies for too long. As of August 2008 iLike will only let you play 25 free songs or song clips per month. Any more than that and you’re forced to pony up $13/month for a Rhapsody subscription.
Have you ever gone to your local mall only to be told that you get only 25 free “looks” at merchandise for the month?
Exactly.
I just received the latest iLike news update via Facebook. With all due respect to the iLike Priestess of PR (the titular woman who signed the note) I’m not happy because it feels like i’ve been stuffed into a washer running the spin cycle at my local laundromat. The iLike update is a huge spin on what amounts to bad news for users.
Here’s the core of the update from iLike:
>You get 25 full-length song plays each month. If you want more, you >can sign up for a Rhapsody account (for unlimited music playback) or >return to 30 second samples.
>We’re also excited to share that Facebook recently picked iLike as 1 >of 2 “Great Apps,” a program designed to reward apps that provide a >meaningful, trustworthy and well-designed user experience.
I agree that the user experience from an iLike usability perspective is a good one. But from the perspective of my wallet, which matters much more to me right now, paying $13/mo for an unlimited subscription to Rhapsody is out of the question for this user. The average American doesn’t want to be saddled with a $13/mo obligation for music exploration system that he may or may not use each month. Netflix it’s not, because it’s not a cheaper substitute for heading to one’s local cineplex. With Rhapsody, people don’t even get to keep the “unlimited” songs, they just get to play them off the web or the device (I personally don’t own a handheld player). Yes the service is offering intangible goods…you know, electricity is an intangible, too, but I would argue a critical one – when I need it, I really need it. Furthermore, pricing of electricity is usage-based. The same doesn’t apply to Rhapsody.
good
http://www.huloo.com
thanks you
A interesting Chinese social network site.
I heard England goc will watch facebook closely