It’s been only a few days since I talked about the proliferation of social networking sites and it seems that Myspace is looking to increase their share once again, this time with online music downloads. It was looking to open its digital doors back in April of this year but wranglings between record companies and Myspace Music have finally been resolved and the service is now live. Well, in the United States at least.
What do I care, I use iTunes already, right? And downloads are downloads, right?
Well, perhaps not. It seems not all digital distribution models are created equally and competitors desperate to compete and reclaim some of the impressive revenue that the iTunes service is now realising are looking at new, advertising-funded, distribution models.
Looking to capitalise on it’s wealth of unsigned and established artists alike; Myspace Music differs a little from some other vendors in this market by offering streaming of all supported artists tracks with no fee. If you like the song, and want to download it to play on your [generic] MP3 player then you can pop over to their partnered music site - namely, amazon.com - and for $0.99 (55p, correct today only!) it’s yours.
With four major players on board: Sony BMG, Universal, Warner and EMI; Myspace are looking to get a slice of the digital download pie as quickly as possible. As well as providing music downloads, revenue for the site will be generated through advertising, concert ticket sales and merchandising. Some disappointment that the service went live without the support of the large independent labels and artists was expressed by Charles Caldas, head of independent rights body Merlin. However, Myspace did include The Orchard, a smaller independent music distributor in the deal.
I know it’s US only at the moment and so not a whole lot of use to our fair shores just yet, but the good news is that all the downloads are Digital Rights Management (DRM) free, so, if/when they do arrive customers will be able to use their paid-for music downloads as they see fit - a wise move.
It’s encouraging to see record labels finally starting to mobilise on regaining revenue that has been lost in recent years to both legal and illegal downloads; but in a realistic, non-draconian way. I, like many others, have sat by bemusedly whilst the likes of the RIAA sue individuals [presumably] to make an example of them; resulting in little more than negative press for the perceivably ‘greedy’ labels.
Simply by partnering with a social networking site like Myspace; that has more than 110 million monthly active users worldwide, and with 1 in 4 of all Americans having an account (Jan 2008), the scope of the audience that providers can reach by altering its business model in this way is nothing short of phenomenal. No doubt large portions of that lost revenue will be recouped in advertising alone, and each label has also taken a share of the service as a whole relative to the size of their catalogue contribution.
The challenge for Myspace Music will now be in transforming itself from a social networking site with a large base of successful and unsigned artists, into a commercial environment where members are happy to purchase their music in a micro-transaction climate.
Even this seems to be turning in the labels’ favour as they remove prohibitive DRM measures from their tracks. Data provided last year by 7 Digital indicate that almost 80 percent of their sales were of DRM-free tracks and even better (for the record companies!) 70 percent of all MP3 sales were full album downloads, somewhat contradicting the previously assumed cherry-picking nature of the music downloading public.
As I said, whether Myspace Music can pull it off, remains to be seen – particularly with such a long delay in getting EMI on board – but any removal of DRM measures is to me a step in the right direction.
Are you one of our cousins across the pond who already uses Myspace Music? What do you think labels should be doing to sensibly improve their profit and sales models? Think DRM is a necessary evil in today’s pirate-laden world? Let us know in the box below, or head on over to our forums to have your say.