MySpace Music Announces iTunes Rival
“With 5 Million Member Bands, Company Could Revolutionize Recording Industry.”
San Francisco – MySpace, the leading social networking website on Thursday unveiled “MySpace Music,” a site that has always been closely associated with music, is launching a free music Internet service with major recording labels to closely compete with digital giant Apple, whose iTunes has just claimed the crown as world’s largest music store.
The ad-friendly iTunes competitor is a joint venture between Sony BMG Music Entertainment, Universal Music Group, and Warner Music Group. The new features will be added to the social network’s existing music portal, MySpace Music.
“The service will unlock new channels of e-commerce, including music sales and ad-supported streaming audio.”
MySpace Music will consist of ad-supported audio and video streaming, a digital music service, mobile content solutions and original programming according to MySpace COO Amit Kapur.
Since a long time, music companies have longed for a legitimate contender to wrest away some of the bargaining power Apple has wielded as the No. 1 online music seller. So, here comes another iTunes killer.
MySpace Music will establish on the News Corporation-owned website’s MySpace Music Channel, and will begin to offer users the power to purchase music downloads, check out ad-supported streaming audio and video, and buyers can freely copy, along with ring tones for mobile telephones, concert tickets and band merchandise.
It has hired a completely separate staff for the site and, with the move, hopes to capitalize on the 5 million artist profile pages it hosts and the 30 million unique users currently on its music-related site. The recording labels seek to bolster the flagging CD market with a push toward digital downloads.
“Certainly, MySpace’s audience reach is an asset. If the project succeeds, it should benefit both MySpace and the record labels. In the short-term, however, until real revenues start being generated, MySpace is likely to be the beneficiary,” Mike McGuire, an analyst at Gartner, said in a statement.
“We see music as an area where we want to do something huge; something historical,” said Kapur.
“We plan to really revolutionize the game entirely.”
MySpace’s announcement came as statistics from industry tracker NPD Group showed that earlier this year iTunes topped retail colossus Wal-Mart as the world’s largest music seller.
“We are thrilled,” said iTunes vice president Eddy Cue.
Ever since Apple started the online digital content store five years ago, iTunes has reportedly sold more than four billion songs and built the most extensive music catalog in the market.
Urge, Sony’s Connect, and SpiralFrog are only a couple of the services at one time envisaged to unseat iTunes. Of this group, only the troubled SpiralFrog continues to limp along. The other two no longer exist.
Although MySpace is up against music retail’s supreme power in Apple’s iTunes, it is totally different from any other iTunes challenger that has come before. An audience of 110 million people from all over the world visit MySpace every month. About 30 million listen to music on the site, and more than 5 million music acts rely on the site for promotion.
Under the terms of agreement, the MySpace Music site will be drawn out and turn into an independently run service with its own executive team comprised of representatives from all of the partners — MySpace, Universal, Sony BMG and Warner Music.
MySpace’s objective is to create a total immersive music experience, the digital equivalent of walking into a large record store, one that features listening posts, CDs, DVDs, vinyl albums, and in-store concerts, according to James McQuivey, an analyst with Forrester Research.
“What MySpace Music performs is establish a new level of belief about what music could be in people’s lives,” McQuivey said. “Apple might find itself following for the first time.”
“We will be producing and layering on lots of community features from a recommendation engine to other discovery tools,” said Chris DeWolfe, CEO of MySpace.
“If you take a look at MySpace Music now, it is up and running at the moment. In terms of adding all the features we have mentioned, it will happen on an ongoing basis and you will see some really big changes over the next three to four months,” he continued.
Nevertheless DeWolfe could not say whether all the tracks would be offered without digital rights management restrictions, he said the service is headed in that direction.
The website, owned by News Corporation, the parent company of The Times, furthermore gave the 20-year-old Londoner Kate Nash a head start following a MySpace recommendation by fellow female singer Lily Allen. Her debut album, “Made of Bricks,” soon went to the top of the UK sales chart.
“MySpace will be able to take advantage of its vast community of loyal users,” said one source close to the record labels. MySpace has more than 25 localized websites, in countries including, India, Brazil and Australia.
MySpace owns offices in 28 countries worldwide; while the music service will initially be offered in the U.S. only, it will eventually expand overseas.
“This is the first time we have seen beyond doubt a serious competitor to Apple’s iTunes,” said one music source.