MYSPACE MUSIC STARTS STREAMING TODAY
MySpace Music, MySpace’s new digital-music joint venture with the major record labels, launches today with an eye on cashing in on the growing demand for advertising-supported song streaming.
As part of the debut, the company has added music giant EMI as an equity partner in the joint venture, joining existing partners Universal Music Group, Sony BMG and Warner Music Group.
The company also has signed content-licensing deals with indie label distributor The Orchard and Sony Corp.’s music publishing arm Sony/ ATV – neither of which will participate as equity partners. (News Corp. owns MySpace and The Post.)
Jimmy Iovine, CEO of UMG’s Interscope Records, which distributes MySpace’s label MySpace Records, Sony BMG digital chief Thomas Hesse, Warner Music digital head Michael Nash, and a yet-to-be-named EMI executive will serve as the board of directors who’ll oversee the venture with MySpace’s leading executives.
The service will be the subject of close scrutiny in music and tech circles.
It marks the first major test of turning a social network into a money maker for the music business. It also marks the major labels’ most significant attempt at an industry-owned digital music service since MusicNet and PressPlay, both failed subscription services.
Some industry executives have expressed concern that with so many music execs involved in MySpace Music there might be too many cooks in the kitchen. There’s also fear of infighting among labels as they focus more on positioning their acts on the service than driving the success of the service itself.
UMG digital boss Rio Caraeff said such concerns are overblown.
“There’s no confusion or doubt about who is in charge. It’s MySpace,” he said. “This is their venture. We are owners in the venture, and the board has a say in major decisions, but it is not trying to move in 10 different directions at the same time.”
MySpace’s partners are hoping the service will set the stage for a more robust ad-supported model for music at a time when CD sales are steadily declining and the growth rate for download purchasing is slowing.
“I don’t believe people go to social networks to buy things, they go to interact,” said Greg Scholl, CEO of The Orchard. “MySpace is a catalyst for an ad-based revenue model that can actually succeed.”
MySpace claims more than 30 million unique monthly aggregated music users and visitors to millions of artist pages.