MySpace Launches Online Music Service

Social networking giant MySpace today launched an online music service, MySpace Music, which provides freely streamed music to its 120 million users from all the major record labels. Because the service is web-based, the music can be played only on personal computers with a web browser, and of course users will need to be connected online. Most egregiously, the service is plastered with advertising as well. Expect it to be a huge hit with the kids.

"We see ourselves as a social port where we filter information based on what's of interest to you," said MySpace COO Amit Kapur. "When all is said and done, we will have the richest catalog of content on the Internet." Right now, MySpace offers access to less than one million songs, compared with 8.5 million songs available for sale in Apple's dominant iTunes Store. Kapur says MySpace will eventually outpace Apple, however.

The MySpace service is just the latest in a long line of attempts by the music industry to sever Apple's stranglehold on digital music distribution. Apple would have reportedly introduced a music subscription service by now, but none of the major recording industry companies were willing to work with them. This recalcitrance has also harmed Apple's ability to sell unprotected, DRM-free music: Other services, such as Amazon MP3 and Zune Marketplace, offer far larger catalogs of unprotected music than does Apple.

The problem with Apple's business model, from the recording industry's perspective, is that Apple refuses to adopt a tiered pricing model in which older, back-catalog songs can sell for less than 99 cents, while brand new hit songs could sell for a bit more. (Apple perversely does offer variable pricing on songs, however; it's just unclear how, why, and when this happens.) Apple tried a similar single-price model with TV shows, but after the best-selling network, NBC, left iTunes Store last year, Apple finally relented and NBC returned. Now, iTunes users can buy older TV shows for less than the cost of current ones.

Of course, the MySpace service doesn't compete directly with Apple or other so-called "a la carte" music purchasing services. But the recording industry believes there's room for a business model based around those who love music but won't buy songs individually. So MySpace Music, in many ways, competes more directly with Internet and satellite radio services, and with music subscription services, such as Real Rhapsody and Microsoft Zune Pass.

What the MySpace service really represents is another push into the social aspects of music listening. Whereas the iPod generation is most obviously defined by white ear bud-wearing "zombies" who are tuned into their own world and oblivious to what's happening around them, services like MySpace Music and Zune have oriented themselves to users who want to share their musical likes and dislikes with others. Whether such a thing will ever be successful, however, remains to be seen.

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