The billboards are up, the CEO search continues, and MySpace Music is set to launch sometime next week. It would have launched last week, but protracted negotiations with EMI to bring it aboard along with the other three music labels is believed to be the cause of the delay. If MySpace Music can launch with EMI it will overnight become a major new force for music distribution on the Web. That is because it will offer free streams of full-length tracks from all the major labels, legitimizing the advertising-supported model that is beginning to challenge iTunes’ pay-per-download approach. It will be more akin to a subscription model like Rhapsody’s, but without the subscription.
MySpace won’t be the first service to offer free ad-supported streams from all the major labels (imeem already does so, and even Rhapsody itself is moving towards a hybrid model that combines free-streaming, an MP3 store, and subscriptions). But it could be the first to run into serious antitrust issues.
Independent labels are already crying foul for being “blocked” from the service. The indies will likely be added over time. The bigger antitrust issue comes down to the pricing relationship between MySpace and the music labels. MySpace will have to be extra careful about how it structures its relationship with the music labels. MySpace Music is a joint venture between three of the four major music labels and is currently raising more capital at a $2 billion valuation. If EMI joins, it will probably want an equity stake as well.
It is not clear how MySpace Music will be paying the labels. But by giving them a financial stake in the business, MySpace Music has a chance of throwing out the current, problematic digital music business model. The problem with advertising-supported streams is that every music service on the Internet has to pay the labels about a penny per streamed song, which is the equivalent of a $10 CPM and is uneconomical.
The big unanswered question is whether MySpace Music will play by these same broken rules or whether it has convinced the labels to lower their prices (or simply accept a share of MySpace Music’s revenues). The music industry desperately needs a new digital business model. There is no question about that. But if the labels are going to allow MySpace Music to pay less per stream or not at all, and they themselves are joint venture partners in MySpace Music, that will open them up to charges of preferential pricing, collusion, and price discrimination. (The music industry’s own hush-hush TotalMusic project could run into the same issues).
So MySpace Music and the music labels might find themselves in a pickle. However, there is a solution that will help not only MySpace Music sidestep the antitrust pitfalls, but could also spark a whole new wave of growth in the entire digital music industry.
It’s simple really. The music labels should reset the rules by repricing the cost per song they charge to every music site on the Web. Whatever price MySpace Music is paying should be the price for all players. (A $1 effective CPM would make more sense). That might weaken MySpace Music’s competitive advantage, but getting clobbered by an antitrust lawsuit would be worse. And you know what they say about bigger pies.
I agree $10 CPM is a freaking lot of money just to break even. It seems that Google is starting to own every market it gets in. But where are the anti trust lawsuits? I dont think anyone is big enough to go up against them anymore
I’d be worried more about failing first then i’ll think about anti-trust when i’m on top. This article was a little pre-mature. I just threw up 5 reasons why this venture wont see it through the year
Your sense of confidence is bold, and your site will document your stance, and while that is applaudable, YOU WILL LOSE.
Just like Arrington lost the whole Hulu discussion.
If you’re so confident, put something on the line on your blog. Put your money where your mouth is!
You’re all talk.
This issue will never hit anti-trust status. There’s too many other options in the marketplace. The owners and investors in this thing have every right to limit access. Chopping out independents may be a stupid business decision, but it certainly is a legal option.
is a legal option as you say
@ Bruce Warila – I agree with your take. There are way too many competing choices available for consumers to go antitrust. I’d really like to see Myspace sell music in partnership with the big labels that is free of DRM and can work with all music players including the iPod. It should be a hybrid model that is both ad-supported and dynamic pricing for tracks based on popularity. The ads subsidize the music just partially.
schoolshift.com > myspace music
for real
7 letters, mp3.com
Get your own mix cd in the mail dude!!!
This NEVER works. ever. Not even for MySpace. The less ghetto MySpace becomes the more people will leave it forever.
I am really looking forward to it. I love MySpace and I love Music, what more can I expect from this. One another company that ties up MySpace and Entertainment is Cruxle (www.cruxle.com). I just love that site because it not just connects MySpace with only music, but TVShows, Movies, Books, Videos and what not! Their recommendations are simply great, check it out and you’ll love it! I am just waiting for MySpace Music .. Go MySpace!
At least Now We know how the Marketing interns Feel.
“At least Now We know how the Marketing interns Feel.”
Hey, don’t look down on the lowly marketing intern. Tom was a marketing intern too.
http://freemysp...e.com/?q=node/2
“Tom worked in a variety of marketing roles and in 2003 we deployed him to work in the MySpace division in a marketing capacity”
Some day this lad too may have an opportunity to be the default friend on Brad Greenspan’s new CitySpace site and become a multi-millionaire in consequence.
Hey Collin Nash, You Dip shit! Quit Astroturfing!
This cruxle.com blog comment spam is getting annoying and I’m gonna start documenting it today. Not just on TC, but many other tech blogs.
Do you people really think were that stupid? Go spam myspace where the retards hang out.
cruxle sucks
we’re*
Bruce Warila:
The reason that antitrust status WOULD be sought and awarded is that the current rates are set by an entity which has to enforce against ALL streaming businesses in order to maintain its authority. If they give one business preferential pricing, it will invalidate the current scheme and prove that they setup the current regime for the sole purpose of driving potential competitors out of the market. And that is the essence of collusion and anti-competitive behavior.
Dennis,
MySpace can collude all they want. They won’t drive anyone out of the market. Colluding with partners does not by default make the behavior worthy of an antitrust action. I am not an expert, but it seems as though you have to jump the driving people out of the market hurdle first, prior to penalizing a company for colluding.
Anti-trust lawsuit hammering on Myspace Music’s head might just demolish everything for them so they should better get “lower CPM” solution as a remedy
however from a Music label’s point of view, $1 CPM is far too less…It should be somewhere around $3-4 per 1000 streams
Hmm, I usually hate those people that advertise other companies in a blog comment! But, for a change, I checked out this company named Cruxle (http://www.cruxle.com) that was advertised by Collin (apparently as a Marketing Intern
and I just loved that company. But I have to admit their UI is not that great, but the concept and functionalities are pretty good. I discovered many new music artists using Cruxle (www.cruxle.com). It’s indeed worth checking it out, but please folks, try not to sell your company in these blog comments!
Screw off you piece of shit astroturfer! Never seen you comment here before, and you still sound like an advert. No matter what criticisms you made, you are full of shit and your IP has been logged.
Phil, please be nice in your words and try not to speak without knowing the real facts. I don’t have to advertise for someone as I am very much engaged with my own work. You can trace my IP and you would know which company I work for. So, stay away from making unnecessary comments on popular blogs like TC. After all many jerks like you are still wandering around — god forbid, please block all such maniacs from this blog.
Jerks like me? You are a friggin spammer. And what I meant by IP logs, is Arrington can easily see that all you cruxle spammers are from the same location. This post is about myspacemusic and you come here with a suggestion for an obviously new website looking for traffic. God forbid, someone use logic. You should be banned from the interwebs for life.
How did MySpace go from being a music flattener crony of the Big Music Labels?
*to a*
If I recall, Joe Biden is the RIAA’s best friend. There is this scenario where he gets in elected carrying 70% of the youth vote and people say “that is a mandate — clearly he speaks for the youth”…
So we’ve got one candidate clearly for the RIAA, one who just got his first iPod this month, and two others who probably don’t even listen to music. The political prospects for stopping the RIAA don’t look promising.
http://news.cne...0024163-38.html
We at EQAL are avid techcrunch readers and appreciate the great articles they have written on us in the past.
We have launched our new show today – LG15: The Resistance – and would love TechCrunch readers to check it out and let us know your thoughts.
The show is available at LG15.com/theresistance. The first episode is titled “Chapter 1- A Call To Arms.” If you like shows like Lost or Heroes, we think you will like our new show.
Thanks
Greg
And this relates to Myspace Music how????????????????
STFU Greg!
Our show is on myspace. If you go to myspace.com, you will see a graphic for our show. That’s how it relates Phil.
Everything and Everyone is on myspace in the US. So effing what? That is not related to this post anymore than my friend’s band that’s also on myspace.
Why are spammers so surprised when people call them on it?
“The show is available at LG15.com/theresistance. The first episode is titled “Chapter 1- A Call To Arms.” If you like shows like Lost or Heroes, we think you will like our new show.”
I agree!
So, Om Malik questions the viability of the Myspace Music venture in its entirety, and Eric claims it is a possible anti-trust case. WTF?
Anti-trust and monopoly is the favorite topic on TC today. Page views? Or reality?
I think MySpace is taking a great step here and is bound to be or continue to be a leader in streaming music. But why only big labels? Not to blast the big labels for providing us with toned down, cookie cutter music that they think will sell, but seriously thats what they have been doing for the past decade!
What new and unique good music has come from a big label recently? This is a generalization of course, as there are many great artists that fill all of our playlists that are from big labels. At the same time there is so much untapped talent out there that lack the marketing and promotional tools that the big labels and now myspace provide.
I think this is a good step for music in general, but there needs to be more support and representation for real new and good undiscovered music, whether it is from the big labels or from an average Joe that records great jams in their make shift living room studio.
The venture is going to fail. Om is right. I think this is on everybody’s mind. Why would you question anti-trust in conjunction with a music venture? tinyCrunch has 5 reasons it will fail, its spot on.
Only reason i still go on myspace is because of the music. If you truly listen to music you will notice that other sites are to search for music, yet myspace is easy to use and they know what there doing. It was MADE for this when it first came out. (kind of).
Still exists!
Its name is “Space Jammer” and it plays MySpace music and creates playlists.
You can buy the music you are listening to directly out of the program at amazon, musicload, 7digit, cd-baby or iTunes (vers. 1.4). You also can watch videos of the bands, send comments to them and much more. The program is freeware and available at:
http://www.spacejammer.com
Hello! illinois breast enhancement surgery
I like very much the writings and pictures and explanations in your adress so I look forward to see your next writings.
To provide useful information, please click to view
Bose headphones
ghd Hair Straightener
Women is Dakota
Sundance UGG Boots
Thank you!