MySpace Music Launches with Notable Upgrades

MySpace will flip the switch on its long-anticipated MySpace Music service on Thursday, completely revamping every element of the music section of the social network and bringing several elements of the music industry to the table with the launch.

In order to win favorable licensing terms from the major labels, MySpace created a joint venture to oversee the music initiative, which is partially owned by the four major record labels. While Universal Music Group, Sony BMG, and Warner Music Group were known participants for some time now, EMI Music Group joined the joint venture as a stakeholder at the eleventh hour, on the eve of the service's launch.

And while a slight bit of controversy bubbled around the lack of independent labels or digital aggregators involved in the joint venture, MySpace also unveiled licensing deals with not only the Orchard, but also such independent distribution groups as ADA, Red, Fontana and Caroline.

The new music service, while operated as a separate joint venture from the greater MySpace service, is tightly woven into the fabric of the social networking site. Artists with profiles (as well as licensing deals) on the service may now stream their entire catalog in full from their pages, whereas previously MySpace limited it to six tracks.

Other features at launch include:

-Fans can post up to 10 songs on their profile for others to stream when visiting, and up to 100 songs for their own personal enjoyment via a playlist building function.

-When any MySpace member (artist or fan) adds music to their playlist, their entire friend list is notified via the “Friend Updates” feature, which will contain a link to the song added.

-Wherever a song link appears on the service, there is also an “add” button that allows any member to add that song to their playlists, as well as a “buy” button to purchase and download the song via retail partner Amazon.com. Additionally, members can search for ringtones available via MySpace sister company Jamster (parent company Fox Interactive Media owns both companies).

The MySpace Music homepage has also been revamped, including a more robust “featured artists” section and the addition of a celebrity playlist section.

Noticeably missing at launch are several features promised when MySpace first unveiled its music plans this spring. They include:

-The ability to buy concert tickets and artist merchandise. Ultimately, MySpace hopes to add these sales opportunities to every artist profile in a future update.

- Content: Due to the lateness of the EMI deal, as well as the ongoing negotiations with independent labels and their representatives, music from artists other than UMG, Sony BMG and WMG is not yet available. However, new music will be ingested on a regular basis.

-Music recommendations: While friends linked through MySpace will learn of each other’s music additions and recommendations, there is no function to recommend new music to users based on either listening history via some kind of algorithm or by matching members who don’t know each other but who have displayed similar music tastes.

-A syndication strategy. All the playlists created on member profiles are limited to those profiles only. Users can’t post their playlists to other blogs, websites or in any other way take advantage of widget-based distribution.

However, MySpace representatives stress that it will upgrade the music service with these and other features over the course of the next year.
Aside from the features, the model behind the MySpace Music service is generating the most attention. It is by far the most ambitious attempt to profit from free full-song streaming based on advertising.

Officials at both MySpace as well as the various record labels believe the majority of activity and revenue will come from the free ad-supported full-song streaming throughout the network. As part of the streaming feature, MySpace created a music player that pops up in a separate window, both so users can enjoy music while navigating to other areas of the site and also to display banner ads that monetize the service.

All labels and artists licensing music to the site will receive a share of the service’s ad revenue based on the number of times their music is played. The major labels involved in the joint venture will also share a portion of all underlying revenues.

Neither MySpace nor the labels involved will discuss the exact terms of the venture deal, but insiders have speculated that the labels collectively own 40% of the venture, and in return dropped the standard penny-per-play licensing fee for music streamed online.

Also notable is MySpace’s decision to outsource all a la carte sales to Amazon.com. Ringtone sales are outsourced to Jamster, and expect future ticket and merch sales to be outsourced as well.