Bloomberg reported Thursday that News Corp.'s (NYSE: NWS) MySpace asset wants to leverage its mindshare to sell music. Not a huge leap of logic there -- MySpace is a touchstone for the online-savvy youth, a group that enjoys consuming songs and going to shows. Only problem is, the MySpace generation also intersects with another club -- the iPod generation -- and going against Apple (NASDAQ: AAPL) won't be a simple task for Rupert Murdoch and his social-networking empire.
Bloomberg points out an another interesting issue for MySpace -- its buzz appears to be weakening somewhat. I found it very interesting that Facebook is challenging MySpace's dominance in terms of user growth, and that Google (NASDAQ: GOOG) may not be doing as well with its MySpace deal as perhaps it theoretically should be.
This music initiative, called MySpace Music, is intended to aid top-line sales expansion. Remember the days when MySpace was the undisputed god of the web? Hey, it's still a major online brand, no question, but I find it funny how, in certain respects, MySpace just isn't the untouchable social network that it once was. It definitely calls to mind the axiom dictating that the hot domain one year might not be quite the zeitgeist the next; I've certainly been hearing more and more about Facebook than I have about MySpace these days.
MySpace is nowhere close to death, though, and MySpace Music will come to market with some heavy business partners: Universal Music Group, Sony BMG Music Entertainment, and Warner Music Group (NYSE: WMG). But will it be enough?
Not to sound like Donny Deutsch, but I have to go back to the branding here. Apple and its iTunes franchise is way too powerful at this point to challenge. Does this mean News Corp. shouldn't try to be a music merchandiser? No, it's a worthwhile experiment. Taking the crown from Apple isn't feasible, but I'll assume News Corp. isn't really gunning for Apple so much as it is attempting to ensure that MySpace remains a major player in social networking.
That's the big challenge. The most influential constant in the formula for success on the web is change, since change is an easy thing in the electronic economy. MySpace has to do all it can to remain cool and attractive to the hipster surfers, and selling them music should help.
Disclosure: I don't own shares in any of the companies mentioned here; positions can change at any time.
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Reader Comments (Page 1 of 1)
4-04-2008 @ 12:17PM
E.J. said...
"MySpace has to do all it can to remain cool and attractive to the hipster surfers, and selling them music should help."
I disagree. Among other reasons, Facebook is eating Myspace's lunch because they've stayed laser-focused on the core functionality of a social network while Murdoch and Co. spend more energy trying to expand into some kind of (crass, advertising-saturated) content portal.
A lot of analysts dismiss the migration to Facebook as a product of some ineffable "cool" factor and the senseless whims of 15 year-olds, but I think that's misguided. In terms of network stability (where Myspace might be the worst of any major website I know of), privacy options, look and feel (don't get me started), social network quality (Myspace, by encouraging random searches, reaks of "meatmarket") and variety of activities possible (Facebook's API announcement took this category in one fell swoop), Facebook is a vastly superior product. There's room for some tit-for-tat with such complex products, but my sense (and the sense of just about everyone I know intimately familiar with both) is that we're comparing Kia and Lexus. To extend that analogy, this music announcement is akin to Kia trying to expand by building Kia airplanes. If Myspace doesn't dramatically improve their core product, I don't see anything but complete failure coming out of these side-projects.