From Lily Allen to My Chemical Romance, MySpace has made its name as a career booster for rising acts. But can the social-networking site now do the same for the beleaguered music business? On September 25th, the company launched MySpace Music, which will allow fans to stream millions of hits and classics for free — as well as buy downloads of songs or albums.
Other sites, legal and otherwise, have offered free streaming in the past, but MySpace's goal is much more ambitious: to create, in the words of CEO Chris DeWolfe, "the biggest Internet-music catalog in the world." Indeed, visitors to the site can hear Bob Dylan's or the White Stripes' entire catalog — and much more.
But in order to land those digital rights, MySpace made the four major labels (Sony BMG, Warner Music Group, Universal Music and EMI) equity partners in the site. Although DeWolfe declines to elaborate, a major-label source says the labels will receive shares in the company.
MySpace Music's scheme is simple: Lure fans with free streaming tunes. Once the fans are there, they'll be enticed to buy additional products — eventually, band merchandise and concert tickets — or download songs. (Fans who want to download music purchase it through Amazon's store, but the process is well-integrated.) The labels — and ostensibly musicians — will get an undisclosed cut of the site's advertising revenue as well as earn money from downloads. "This is about advertising, sponsorship and all sorts of ways to draw upon other potential income streams," says RCA Music Group general manager Tom Corson. "We're hopeful. We're just trying to stay in the game."