Expected MySpace service to compete with iTunes
By Jennifer Netherby
NEW YORK (Billboard) - Amid ongoing competitive pressure from Facebook, MySpace is taking its latest shot at entering the music business as other social networking peers, such as Last.fm and imeem, are making big audience gains with ad-supported music offerings.
According to sources, MySpace is planning a service that would combine free ad-supported music listening with paid MP3 downloads and music subscriptions.
MySpace parent company News Corp. has approached the major labels about forming a joint-venture music site, similar to its partnership with the major Hollywood studios for video site hulu.com.
The new service would be operated by MySpace and seemingly be positioned to compete against every offering from iTunes to subscription service Rhapsody to social networks. Details are still unclear on MySpace's plans, but it is expected that MySpace will build the music service on its existing social networking base, which draws nearly 70 million U.S. users each month.
MySpace did not return calls for comment.
During the last year, the four major labels have warmed to the idea of allowing users to share music on social networking sites, inking deals with Last.fm and imeem for a cut of advertising revenue. Music is the central connector on both sites: Users create and share playlists with their favorite songs, find and add friends based on their music preferences, listen to full-length songs on demand and purchase downloads through links to Amazon and iTunes.
CBS-owned Last.fm reported a 92 percent jump in U.S. users in the span of the last month, making it one of the fastest-growing music networks. Last.fm now claims 21 million unique visitors per month, close to the 23 million unique visitors of rival imeem, which has also seen strong growth in the last year.
ROOM FOR GROWTH Continued...