As you may have heard, MySpace launched its new music service this week, and the press has been buzzing ever since. The new model, intended to take on iTunes, which just unseated Wal-Mart as the largest music retailer, makes some music available for free in the presence of advertising, as well as offering other music goods like merchandise and concert tickets. It’s a one-stop-shop for all of your music needs, interests, and interaction. (Interesting side note: there was a time when the price of an album and concert ticket were the same. Look what the Internet has done to that price parity.)
Without getting into too much detail, the moral for MySpace is that it had to find a purpose to make it more than just “a place for friends” that otherwise had no way to effectively monetize all of that traffic. The site was founded with music and hipsterism at its core, so this is a natural progression to be sure.
From MediaPost: the potential of free music in exchange for advertising is only part of what’s interesting here; it’s the potential to use social networking to change the way another industry makes money. While many may wring their hands over how social media [MySpace] will monetize itself, the hand-wringing is much more acute in the music industry. Though the record industry is better off with legal downloading options such as iTunes than without them, according to Nielsen SoundScan data for 2007, album sales — including those in digital formats — declined by 9.5% last year, despite a 45% increase in digital sales. ITunes and the iPod have revolutionized consumer habits, but not solved the basic economic problems of how to make the music industry viable again.
With music, the head-to-head challenge is one of traditional online retail (iTunes) verses Web 2.0 social networking (MySpace). If MySpace gains traction and ultimately prevails, it’s a good sign for the green movement. For if MySpace is able to save both itself and the music industry through purpose-driven social social networking, we should certainly be able to save ourselves and the planet using similar tactics.
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1 Social Networks Verses Social Networking. It Comes Down to the Product. | Max Gladwell // Aug 24, 2008 at 11:51 pm
[...] it “a content-rich hub with a social component.” This comes on the heels of announcing MySpace Music, which is intended to monetize the MySpace audience in ways that being just a social network [...]
2 Ten Predictions for the New Year (MG01) | Max Gladwell // Apr 4, 2009 at 9:48 pm
[...] network got its start and that’s where it will end. Unlike we previously thought, however, MySpace Music will not make money. The lesson to be learned here is that when a startup is bought by a huge [...]
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