One thing is for certain – the six month old MySpace Music project is throwing off a lot of cash to the labels. That’s because MySpace’s 75 million or so U.S. users are streaming literally billions of songs a month. And they have to pay for every song streamed.
Labels are known to give streaming rates for on demand music of around half a cent per song play, but they are negotiated on a deal by deal and label by label basis. Journalists have tried repeatedly to understand the rates that MySpace is paying since the volume means lots of dollars are at stake. MySpace has always guarded this information closely, since it’s a competitively valuable piece of information. But there’s another reason they may be so secretive – the deals they cut with the four big labels may all be very different. And the deal they cut with at least one label, Warner Music, may not have streaming rates at all.
Our sources say Warner has been complaining about the deal they did with MySpace. That deal has no per song streaming cost, but includes a revenue share on advertising displayed when the song is played. That revenue share hasn’t been what they thought it would be. And the staggering number of plays of songs from their catalog, combined with their newly acquired knowledge that their competitors are being paid per stream, has left them steaming mad.
Warner will get little sympathy from, well, anyone. But they’re telling people that they plan to make changes when their deal comes up for renewal, or pull their music from the service. But the fact that their revenue share is significantly less than they thought it would be means MySpace Music may not be monetizing as well as they had hoped. That means the whole ecosystem may be in danger. If MySpace is facing tens of millions of dollars in losses every year (or more) from royalty payments, it’s only a matter of time before they’ll give up.
Already the service does things to limit streaming and associated costs, like only playing four songs on a playlist before asking if you are still there. That leaves the door open for services that have different business models and allow for the user experience to come first. See LaLa and the still fantasy-land MOG music service that look promising.
MySpace Music refused to comment on this post.
So there’s people still using myspace… Huh, interesting
Jesus, what a stupid ass comment.
Why is that stupid? I’m also surprised that people are using MySpace.
I can’t think of one good reason to still be there.
Jesus says Warners are no good at anythng on TWO sights and he’s not exorcising pit bulls.
I will never leave MySpace. The support of and for musicians is above par.
So, there’s people still leaving comments on TechCrunch? Huh..why?
Edgar Bronfman, Jr. could be the biggest Dbag on the earth.
The guy was born into wealth and had no sense of how the world functions. He has proven to have very little business acumen and continually makes decisions leading to eventual back-steps and regrets.
He has shown little respect for business colleagues or adversaries and is basically a classless bafoon.
In time, he will be the prime example used in business schools around the world representing both a failed business man and a spoiled rich kid who tanked the family name.
http://www.ciga...540,176,00.html
I love MySpace Music! My playlist contains everything from my brother’s own recording, U2, Emily Wells and Neko Case. I am huge music fan and no other service can compare. It rocks!
Myspace’s best shot is hiring it’s own A&Rs and doing contests to sign artists to a myspace label.
They could just take the highest usage tracks and make a compilation and be done with it.
There already is a MySpace label. It launched in 2006, and they call it “MySpace Records.” It’s a joint-venture between them and Interscope.
On one place you say “as high as half cent” and soon after you say “as low as half cent”.
Until the music giants give up the royalty model for public streaming / broadcasting etc the driven model won’t work.
Here is the question: I would pay $ 9.00 for a really great strewing service that is accessible via my computer and iPhone, that keeps my list of favorites etc. How much would you pay?
Royalties give everyone what they want–more music. The giants just have to learn how to share with their artists, and develop music people want (not what radio wants).
That is $ 9.00 / month of course and I also meant the ad driven business model above that.
Sorry for the sloppy writing. Should really read my stuff before firing the submit button
.
I’ve said it so long I feel like a… cracked cd?
The only thing Myspace et. al are doing is paying many of these labels to stay alive – when the internet payments (shakedowns) stop, the labels will financially cave in and we, the consumers, will be better off for it.
This money doesn’t go to the artist. It doesn’t make it to the writers. It makes it into the hands of the RIAA who are pretty much wholly to blame for the mess the labels are in in the first place. Well, them and dolts that make agreements with myspace based on advertising revenues, haha – what they must’ve thought when the click-thru rate was exactly 0! People don’t stream songs so they can click on an ad. Geez.
If I’m still buying CDs, why shouldn’t people be using MySpace? Agreed with the 9.00 montly payment for a great service idea.
What is this “CD” that you mention?
It’s a dud DVD, perfect for spreading your almighty subliminalities and encouragement for the production of more malt liquors.
For whatever reason, whenever I think “streaming” music, I think super crappy sound quality that you get when you preview a song on Amazon or iTunes before buying it. I know that’s perhaps not the case for when you do streaming with these new services, but still, it’s a psychological barrier for me.
Of all the actions labels have taken over the years, this isn’t the one they should be embarrassed about.
Hopefully, the contracts last long enough that they just bleed the labels without actually harming MySpace themselves. Though I doubt this is the case.
pure speculation based on weak sources…
Welcome to TechCrunch! I actually thing Gawker is less gossipy at times than TC.
What’s a Gawker?
Never mind, Don’t care.
ouch
haha..you just KNOW MA must’ve written up this story with glee! Any chance to stick it to a major label..and rightly so.
is that bad or is that bad, i think its the snow ball effect here and in the end is sense a lot of trouble.i was searching for property to let in central london for quite some time and i accidentally found this amazing website no agents 24 with loads and loads of information about tips for tenants, tips for moving, hips. I really like my new house. i went out for some fresh air today early morning, although i am generally not the morning person type but i have to admit i really enjoyed it.
So buy some bread for that.
Does anyone monetise as well as they hope?
I’m not finding enough pop cans.
Its surely only a matter of days before Warner pull their content from every service on earth- and become the first major to exclusively release their music into a time capsule destined for opening in a mythical Bronfman derived age of the future where people actually do and pay what Warners want?
If this is the music industry dying a slow painfull death, then the movie industry will be a slow painfull epic.
They will rebound; and you will again pay for music.
This was an enjoyable thread
. I agree with top of the thread, I read Myspace is losing steam. Myspace has to do something to improve and innovate. Their audience is losing interest with so many clones ,Blubster and Twitter and Facebook.
If I want to listen to music, i RARELY go to MySpace. I attempted to use the music service, and it was ridiculous. It completely blows.
That said… based on the a majority of other music executive decisions, I am not surprised that Warner regrets “the deal.” It is just another sign that Labels do not understand the internet and how people use it when it comes to listening to music.
It won’t matter in the long run… labels are dying if not dead already.
Interesting earlier comments on MySpace even being relevant as a recent report of marketers said they viewed Facebook, Twitter, blogs and LinkedIn as their top 4 social media tools…
Are Marketers Viewing Myspace As A Top Social Community Site Anymore?
http://weareorg...y-site-anymore/
Marketers are sheep that only understand what others publish,