34 thoughts on “Why MySpace Music Is Likely to Fail”

  1. Couldn’t agree more – 3 issues here as I see it.

    1.People are getting tired of logging in and out of services setting up friends, inviting people to join them and what not, so as a band (I have 2 band pages on myspace) what I find is that the “friends” that you amass are usually just other bands.

    2. They aren’t offering anything really earth shattering…you can listen to a bands entire catalog – big deal. If it’s an indie band, they probably only have one or two albums and you can preview songs on itunes already. There are lots of other sites that do this better (check out http://www.thesixtyone.com for example)

    3. They are betting a motherload of money on this – which means that success can only be quantified as two or three motherloads…and that’s not going to happen under this kind of model.

  2. How can Hulu – a site with zero technology and a business model that undercuts the value of advertising around prime time VOD TV quality content – have a valuation of $1B? Hulu only makes it by being a destination, and Comcast et al have shown that no one – Veoh, Hulu or the networks directly – will replace a multichannel cable service without the MSO playing some role. So Hulu, that sells ads at 50% the rate as the sales team from the networks from whom Hulu licenses content and only puts in 3 minutes of ads per hour, is worth $1B? That’s simply ludicrous.

    Have you ever tried watching a program on Hulu from home on a wireless network or in a hotel room (ie. not the fat pipe at work)? It’s simply unbearable compared to ABC.com or FOX.com. And it is not a TV like viewing experience. Hulu should go away so that FOX and NBC are freed to go after the market directly without worry that another sales force is out undercutting the market selling their same audience…and serving 3 minutes of ads per hour on top. Internet TV cannot survive under the Hulu model.

  3. to add to a previous comment here: “friends” on myspace band pages are usually taken to indicate counts of fans. if you have a myspace account, you know that you occassionally get friends requests from bands. even for those who agree, there is little interaction between the two beyond that.

    how do people find their music these days? and how do they consume music beyond that? I especially love this part of your post: “The record labels are still not facing the proverbial music and understanding that their business model is completely broken, including the licensing end of the game. They need to learn that they don’t need to start a company, but instead encourage a thousand others.”

  4. I don’t think this is going to work either, mostly because consumers don’t need it. People seem to really love iTunes. Record labels might not like iTunes because they don’t make enough money from iTunes to sustain themselves. (That might explain why they are investing in this and in so many other services.)

    If I worked at a record company, I’m not so sure I could identify what exactly music fans want from me other than free music. I’d probably try a million crazy things too.

  5. I’d have to disagree.

    I am friends with lots of people in the music business including musicians, a number of small labels, a handful of promoters (think Bill Graham), and other B2B players. I am also a heavy lurker in the ‘valley echo chamber’. You seem to understand that the music industry has shrunk and are in need of new revenue streams, yet you dismiss the fact that MySpace has identified those exact revenue streams (concert tickets/ merch) and has a plan to execute. I will grant you ad supported streaming will be difficult if not impossible to pull off. You also failed to mention the partnership myspace has with zazzle, which should put them in a good position for distribution/fulfillment/ inventory management.

    MySpace continues to lead in members in the 9 largest markets in which they participate, the most significant being the US. Most people I know are not always online and mostly use PCs for work with a possible hour or two in the evening (including a myspace visit) . They are huge music fans however, going to at least 1 show per week. Just as “ampbuzz” states above these people don’t want to sign up for another site, and they already have myspace.

    @ampbuzz- Everyone is on myspace, they don’t want to sign up for, remember, or tell their friends to go to “the sixtyone”. Myspace has the members and recognition (esp in the music biz). You say people don’t want to go to all these sites, and then you mention some very niche player in the indie music space that just doesn’t have enough to offer. Everyone is on myspace, why do we need another space?

  6. I second Om on this, but not with the fact that MySpace music will fail because of severe competition. There is no clear market leader in Music recommendations, few successful companies like ilike, etc are out there, but still there is no market leader yet! I stumbled upon a company called Cruxle (http://www.cruxle.com) and found it very interesting because they bring all your entertainment in one single place based on recommendations from Social networks. They seemed to be much more interesting than MySpace Music, and I strongly believe that only if things consolidate in one place, there is a chance to become a market leader. My few cents!

  7. @Kimberly

    Last.fm (CBS/viacom)

    The music recommendation space has very good technology, but their margins are horrible. One needs to be infront of a PC or iphone to have those services. Most people still get music recommendations from their friends and radio. The long tail will be very thin, good luck.

  8. @Tim

    It is true that the margins will be lower for music recommendation companies, the major reason being the target segment relatively smaller (not all people will want to go to a website to get music recommendations, unless they are big music buffs — similarly for movies or any vertical in the entertainment sector). However, as I’d mentioned, if there should be a leader in this recommendation space, then the company should be capable of attracting a bigger target audience, in other words, all movie buffs, music fans, tvshow fans, book fans, video fans, sports fans, video games fans should be targeted and we need a perfect website that will cover almost all of these segments. Essentially it should become a portal for recommendations for all verticals of entertainment. And I believe Cruxle (www.cruxle.com) is one of those type of companies that has 5 different verticals of entertainment. The beauty of that site is that they transition people from one category (say movie fans) to other category (say music) even if they are not that big a fan of music. Quite ambitious, but certainly interesting, and they don’t expect any thumbs-up/thumbs-down from users in order to provide recommendations — it’s all done automatically deriving data from Social networks.

  9. What I want to know is how Myspace and the labels are going to incentivise music lovers, bring them into the value chain and at the same time attack online copyright infringement.

    P2P sharing is the real threat to the industry – not itunes.

    Myspace provides THE BEST opportunity to counter that threat… call me if you are still looking for a CEO…!

  10. Paul:
    you can already go to imeem, search for an artist and title and listen to that track in CD quality, that experience is already making p2p less interesting for many users. Myspace music is a less potent weapon against p2p since it’s missing one major label and a whole lot of indies.

  11. The “old-school”- record industry is dead.
    And on myspace it’s getting harder and harder to promote yourself as an artist.
    The future are sites like Jamendo. More and more great Bands are giving away their music for free there. Come one – who trusts a major these days?

  12. Well said Om, especially the anti-trust part.

    Unless MySpace was catering to specific music niches, there is no wide moat that makes this business idea defensible.

    Now if they had EXCLUSIVE deals with some new talent and existing talent, I would be more optimistic. Merch. will be the best opportunity, but only if the artists allow their greedy labels to get their hands on that – which won’t happen.

    p.s. I watch Hulu on a wireless network at home and have zero complaints. I also watch Joost and rent DVDs from Netflix. I need ABC.com for nothing

  13. @David,
    If you are a big movie/music/books/tvshows/videos fan, then you must probably check out http://www.cruxle.com. They have excellent recommendation engine that directly comes from MySpace people. Smart move in the recommendation space, I guess!

  14. Still exists!

    Its name is “Space Jammer” and it plays MySpace music and creates playlists.
    You can buy the music you are listening to directly out of the program at amazon, musicload, 7digit, cd-baby or iTunes (vers. 1.4). You also can watch videos of the bands, send comments to them and much more. The program is freeware and available at:


  15. I think when Amazon join MySpace for the download shop Myspace Music will be soon No2 behind iTunes.
    The rest of the pie – 95% – do still not pay anything. You are right! And nobody knows if the digital natives who never learned to pay for movies or music will learn it in the future. But the also have such little attention time that they will soon get bored form in audio ads, in video ads etc…

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