John Paczkowski

Recent Posts by John Paczkowski

MySpace Music: Like Napster … With a Business Plan

MySpace is no longer just “a place for friends,” deceptively flattering photos and seizure-inducing Web page design, but a place for the music industry as well. This morning the company rolled out MySpace Music, the music destination site with which it hopes to take on Apple’s (AAPL) iTunes. MySpace Music, in the words of MySpace CEO Chris DeWolfe, is a mega-music experience. “This is really a mega-music experience that is transformative in a lot of ways,” DeWolfe enthused earlier this year. “It’s the first service that offers a full catalog of music to be streamed for free, with full community features, to be shared with all of your friends.”

And it certainly is that. With all four of the largest labels on board–including EMI, which signed on just yesterday, free ad-supported streaming of their catalogs, as well as an Amazon-powered digital music store that sells MP3s playable on the iPod and most other devices–MySpace will go down in history as the biggest Amazon (AMZN) affiliate ever–MySpace Music could become a powerhouse in the digital music space. And quickly, too, with 120 million global users, about two-thirds of whom already stream songs to their MySpace pages.

A big number, 120 million global users. Napster, at its February 2001 peak, had just 26.4 million users worldwide, to whom it promised free music. And look what it did to the industry.

“When Napster went and set the content free, it was this incredible music experience for users, but it was illegitimate and it didn’t have a business model backing it,” MySpace COO Amit Kapur told “That also wasn’t designed to win … how do we create an experience that is designed to win? How do we align the interests of every constituent involved in this process? And that is what we believe we’ve done.”

Could be. Clearly, the venture is a noteworthy step for the music industry, whose failure to embrace digital distribution early on has cost it dearly. And it’s one that could pay off. “MySpace has the audience and environment to enable the music industry to get to the next digital level,” Forrester (FORR) analyst James McQuivey told when the effort was first announced. “What iTunes offers is a good buying experience, but that’s not all people do with music. They talk about it, they share it, they try things out. Remember, this is the kind of activity that (record label) Universal Music Group was suing MySpace for previously. I think the labels said to themselves, ‘Oh, if we enable fans to have a fully immersive experience, they might spend more on music.’ MySpace can offer a place where all aspects of the music experience can be expressed. Imeem was getting close to this, but MySpace, if they don’t mess it up, should take Music 2.0.”

[Napster Chart Credit: Wikipedia]