MySpace Music's Space-High Hopes: Commerce Sales Will Replace CD Losses

(PaidContent.org)  This story was written by Rafat Ali.

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Fortune gets a first crack at doing a story on MySpace Music, which is launching in its new avatar next week. And while the News Corp (NYSE: NWS). subsidiary has been setting expectations on the music service sky-high with teasers, other established competitors like Imeem have been out in front on a PR offensive talking about how their services stack up in the market, their points of differentiation and their lead.

Some major points about the service and the challenges:

-- Three of the Big Four music companies: Universal, SonyBMG, and Warner Music are in the JV
-- Any song from the catalogs of the three music giants free.
-- On-screen ads along with the music.
-- Users will be able to create playlists on their own pages made up of tracks from any major artists.
-- If listeners really like a particular song, they can buy it with one click and have it routed immediately to iTunes or Windows Media Player via a download service created by Amazon.
-- Amazon (NSDQ: AMZN) is very hopeful that this will help increase its share of music market, but with an iTunes link as well in the service, would be difficult.
-- Chris DeWolfe believes that MySpace Music could generate enough money through ad sales, downloads, and eventually music-related e-commerce like T-shirt and concert ticket sales to put the industry back on its feet again.
-- DeWolfe is completely confident that this service would help replace lost CD sales. Imeem CEO Dalton Caldwell, which has had a similar music social networking service for a while now, warns against setting the expectations bar too high.
-- Labels wil get penny per song play, which means MySpace will have to sell at $10 CPMs just to break even..which is a tall task considering very low CPMs on social networking sites in general. This is where they hope a dedicated music environment will help in pushing up CPMS and more branded plays.
-- Toyota, McDonald's, and State Farm are sponsoring the launch.
-- The BIG question: Why will people buy more music when MySpace will be offering so much for free? DeWolfe thinks people still need to get music for their iPod. And what was that thing about trying to develop an alternative to the iTunes-iPod combo?



By Rafat Ali