The new all-singing, all-dancing site might look impressive, but there are still reservations as to whether it can win back users lost to Facebook, YouTube and Spotify
When MySpace Music launched in the US last year, I blogged about the outrage felt by many independent labels. Charles Caldas, the head of Merlin, an organisation that represents some of the biggest indies, including Beggars Group, Cooking Vinyl and Domino, expressed dismay that a site which had built its reputation on independent music would launch without having indie labels on board.
The reason Merlin wouldn't sign up to the service was that MySpace Music is a joint venture with the major labels, which own 40% of shares in the company (as compared to 16% in Spotify). As MySpace (which is a division of Rupert Murdoch's News Corporation), would not give Merlin any shares, it meant that every time one of their independent artists was streamed, their competitors would get paid. Hardly fair for the artists represented by Merlin, which claims their labels represent 10% of the global music market.
This resulted in negative coverage of MySpace Music in the US and Australia, where the service launched in October. An industry source says: 'The venture started with massive arrogance in the US. From a user perspective it was crap. Pirates are successful because they've got everything, and MySpace Music was missing independent acts like Vampire Weekend and the White Stripes.'
As MySpace Music launches in the UK today (Thursday), it has finally made a deal with the indies. So what changed? 'The independent sector is so strong here in the UK,' said a source. 'I think MySpace realised that they needed to have them on board.' Caldas says he can neither confirm nor deny if this means they now have equity in the company. 'Don't jump to the conclusion that we do. There are many ways you can structure a deal to make it valuable. What I can say is that Merlin will participate on the board of the company.'
I must say the relaunched site looks pretty impressive. The playlist functions are heavily featured, which could make it useful as a discovery tool. It integrates blogs and news coverage about the artist as you listen to their music or view their videos, making you aware of any gigs they may have in your area. The company's president, Courtney Holt, tells me that they have deals in place with ticket retailers, incorporating the opportunity to buy gig tickets through the site.
The artist dashboard gives the artists/labels an insight into who is listening to their tracks and where, which is useful when you plan a tour. It uses iLike to monitor how tracks are spread through other social networks, which is useful in finding out how certain promotions perform.
But I still have reservations. Firstly, though Holt says that the downloads part of the site (powered by iTunes) is just as important as ad-funded streaming, I can't help but think that, as with Spotify, streaming will dominate. Many question if the ad-funded model is viable, with some claiming that Spotify is haemorrhaging the money they've raised through investments to pay for the content. Holt says he's not worried about that (although he would say that, wouldn't he) and that they've got plenty of ways to make money through integrated branding etc.
Secondly, the fact that the major labels would virtually sit on both sides of the table when negotiating the per-stream rates as they're part owners of MySpace Music and, at the same time, the rightsholders of much of the content licensed by the company begs the question: where will their loyalty lie? Many artist managers are worried that any revenue will disappear into the 'black box', the non-attributable income that never filters down to the creators.
Finally, will MySpace be able to win back users from Facebook and other social networks? Ever since it was bought by News Corps the site has lost its former independent status. From what I can tell, there is now a concerted effort to regain its image as a champion of independent artists. And yet the press release states that the service has 'exclusive personal playlists from a wide cross section of famous music fans ranging from Katie Price to the Vatican'.
When I mentioned this to a source close to MySpace Music, he said: 'They're so corporate!' Having got so many things right with this new music service, will that be their stumbling block? Only time will tell.