It seems that after five years in online purgatory following the collapse of its social media empire, MySpace is ready for a relaunch as previously first reported back in May, and now isn’t pulling any punches in its plan to reassert its dominance in the online music sphere.
More recently, Interactive Media Holdings, who bought Myspace with Justin Timberlake for a paltry $35 million just a few years after News Corporation dropped a whopping $580 million for the business, have been slowly revealing new details about what can be expected from the redesign with a brand new video teaser last September, along with the shock announcement last week that all old profiles and data would be deleted in the refresh.
But according to a leaked investor presentation obtained by Business Insider, that’s not the only tricks the new Myspace will have up its sleeve.
According to the leaked document, Myspace is seeking to raise an extra $US 50 million in order for the relaunch to be seen as a direct competitor in the digital music streaming industry – pitting it head to head with popular streaming leaders like Spotify – which recently received a $100 million boost from investors like Coke, and Pandora – who are currently under fire from musicians after the internet radio service sued ASCAP.
The Myspace mobile subscription service is due to launch in the second quarter of 2013 and will incorporate an e-commerce platform for music downloads, event ticketing, and band merchandise.
The rebooted social media site has some distinct advantages over its competitors. Myspace currently has the largest single library of songs, at 42 million, dwarfing Spotify’s library of 18 million songs.
They also have a direct relationship with over 5 million artists and are the only company in the world with global music rights from all the major and indepedent labels for streaming, music download, and music subscription.
Myspace believes that it has a significant cost advantage because of their proprietary 27 million song library from unsigned artists which has a zero cost basisAccording to the leaked document, Interactive Media Holdings believe that along with their massive library of music they also have an advantage over Spotify and Pandora due to the type of licensing royalties it pays. One of the biggest challenges facing online music streaming services is the significant cost of content associated with such services (which was part of Pandora’s recent case again American royalties body ASCAP).
Spotify pays the On-Demand rate to the labels for the majority of songs players on its services while Pandora pays the low Radio rate to labels for the majority of songs played on its service
Myspace believes that it has a significant cost advantage with respect to the music streaming costs compared to Spotify and Pandora because of their proprietary 27 million song library from unsigned artists, which accounts for around 50% of songs plays on Myspace and has a zero cost basis.
Myspace estimates that Spotify pays around 7c per listening hour per user, and that Pandora pays around 3c per listening hour per user. Myspace however estimates that given their huge catalogue of unsigned artists they will only have to fork out a little over 1c per listening hour per user.
The document also detailed exactly how Myspace intends on using their $50 million new capital, including $10 million for marketing the relaunch, $25 million for content acquisition costs including renewing music rights with labels, and $15 million for general working capital purposes.
Which, financially speaking, puts it in much better stead than the recently launched Google Music service – which has been criticised as ‘hypocritical’ by the British Music Industry – and puts Myspace more in line with the high rollers and big players, like Microsoft’s new Xbox Music platform, and controversial Megaupload mogul Kim Dotcom.
In the meantime, the social media site is focussing on rolling out their refreshed design around the world and it seems the public is already warming to the idea of the reinvigorated social network.
Though traffic to Myspace.com was halved in the period from 54.3 million unique users in November 2010 to 24.9 million unique users in November 2011, according to Comscore, that drop-off appears to have stabilized and even seen a little rebound, with 26 million users in September 2012 – enough for Myspace to still rank as one of Comscore’s top 50 sites on the web during the month.
Myspace however estimates that given their huge catalogue of unsigned artists they will only have to fork out a little over 1c per listening hour per userWhile Myspace may never exist in its old format again, it’s clear that the market for a music-discovery medium is still standing strong, and looking promising at that; particularly for the 5 million unsigned artists who’ve uploaded 27 million songs to Myspace.
The new website contains a blurb and flash image of a vinyl record spinning, which demonstrates that the MySpace facelift is staying true to the previous promises that the website would be holding fast to its fundamental commitments of synergising social networking with music.
“We’re hard at work building the new Myspace, entirely from scratch,” begins the teaser. “But we’re staying true to our roots in one important way—empowering people to express themselves however they want. So whether you’re a musician, photographer, filmmaker, designer or just a dedicated fan, we’d love for you to be a part of our brand new community.”
On closer inspection it appears that there’s a mixed media approach going on, including linking music mixtapes with photo albums and separate ‘walls’ to focus on specific interests – especially music. Including a ‘Discover’ page that again lists a ream of artist interviews, reviews and songs – presumably linked from various internet sites and media – in a deliciously visual format.
“One thing we keep hearing is, ‘How do you make this my space — literally?'” says Interactive Media Holdings’ Chris Vanderhook. “I have six or seven different social platforms. In order for me to make it in today’s business I have to be a tech wizard when all I wanna do is record. I need someone to make it easier for me.'”
“That hit home for us,” he continues, “how do we develop a place to actually make it their own and house all these different areas they do on all these other platforms and make it simple for the artist?”
Many in the music industry agree, with one major label marketing exec saying recently, “I don’t think anyone’s really been that voice of the fans for a really long time. The Hype Machines and Pitchforks all have a place, but that’s very far away from the mainstream. As much as I love and respect what those sites do for our artists, I feel like that spot somewhere between the hipster and the mainstream is a very empty place right now.”
While the new build of the site is still in beta period, there is no Steve Jobs sized launch planned, and the next phase of the music-centric Myspace will remain an invite-only beta through early 2013.
