With the launch of Myspace Music only six or so months ago in the US, cracks are appearing in the joint venture between FOX Interactive (owner of MySpace) and the four major label partners. According to recent reports from CNET, MySpace has experienced trouble in converting the decent traffic levels to the service into actual music sales. Obviously the major labels are unhappy with this and want to see traffic converted into viable al-la-carte sales of music.
Drilling down, does this also signifies clear evidence that Myspace Music’s advertising streaming model which all the majors share profits in is not generating significant advertising revenue despite good traffic figures? This reinforces TMV’s view that large corporate companies whether they be Google al la YouTube, and including Fox Interactive are experiencing trouble in leveraging decent cpm rates for premium music content. Is this the nail in the coffin for ad-funded models? TMV doubts it, especially with last week’s news that Imeem has secured funding to keep it operational for the time being.
From another angle, Myspace Music was always a two-tier revenue model – ad-funded for streams but then pushing consumers to Amazon MP3 if they wanted to purchase al-la-carte style. This is where TMV view a key problem. Why push to another store outside your own ecosystem? In TMVs view that is not a viable proposition in either the medium or long term. The fact that advertising revenue has not been enough to stop the major labels complaining does signify a sure sign that change does need to be implemented.
With Murdoch only recently insisting that the online news properties will become subscription based (which TMV believes will be a large failure), how long before MySpace music brings al-la-carte sales in-house? Obviously, Murdoch’s views fits well with most major label desires to push consumers to subscription models. So perhaps a match made in heaven?
TMV believes that farming consumers off to the Amazon MP3 store to purchase tracks is one of the key problem areas for the MySpace music proposition. Perhaps many of the consumers using MySpace music just do not like the user experience of being forced to use an outside company to purchase the tracks? However TMV doubts this, as we view the key problem as the dreadful user experience of both MySpace Music Service (which we tried out whilst at CMW back in March as currently its only available in North America) and MySpace on the whole. One only has to cite the Jonas Brothers (which by the way, we think suck big time in terms of music quality) who were used as the faces for the launch of MySpace Music, and their recent subsequent move away from MySpace towards Facebook (http://news.cnet.com/8301-13577_3-10233762-36.html) as a potential trend to look out for in the near future…
On a side note, when are we going to see a proper integration of a music player in Facebook? Yes I like iLike but it is not the same thing…. Or perhaps even better, an inclusive ad-funded model based on parity within Facebook where all music content owners are compensated for their content. Although, TMV would really like to see Facebook launch its own music store with options for subscription as well.
Yes, Myspace Music has been the first real bridge between social networks and music stores, but we believe there needs to be more and across all social network offerings. Then again doesn’t Last.fm provide this albeit based around a streaming model? Going even further, with the simplicity and ease-of-use Spotify streaming service, will retail al-la-carte services survive in the long term? Only time will tell, but in TMV’s view Spotify will have a damn site better chance in competing with P2P, over a crap MySpace Music user experience, as is now currently the case.
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