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He is planning to create a competitor to MTV. Much like Viacom’s CBS decided to use the broadband web to bypass cable and compete against the 24-hour news networks like CNN and FoxNews. Guest Post by Robert Young There has been much speculation and analyses as […]

He is planning to create a competitor to MTV. Much like Viacom’s CBS decided to use the broadband web to bypass cable and compete against the 24-hour news networks like CNN and FoxNews.

Guest Post by Robert Young

There has been much speculation and analyses as to why Rupert Murdoch acquired MySpace. The prevailing consensus seems to be that News Corp’s motivation was to buy ad inventory targeted at the social network’s valuable young demographic (e.g. see John Battelle’s comments.) That’s overtly simplistic. Moreover, it’s very difficult to justify a $580 million cash payment on that basis alone.

Although ad inventory was surely part of the equation, I believe there is larger strategic reason that motivated Murdoch to make such a bold move: He is planning to create a competitor to MTV.

Much like Viacom’s CBS decided to use the broadband web to bypass cable and compete against the 24-hour news networks like CNN and FoxNews (see PaidContent’s coverage here), the acquisition of MySpace positions Murdoch to challenge the dominance of MTV in their category. I’m willing to bet that he will go even further by eventually extending the MySpace brand to include a dedicated cable & satellite network/channel. He is after all an old media guy.

In fact, just a couple of weeks before News Corp. announced the deal, we all witnessed the web’s potential in this context when AOL’s webcasting audience for Live 8 outreached MTV and ABC’s ratings of the same event (details here.) Such a data point can go a long way towards justifying a $580 million price tag.

In addition to live concerts, MySpace is an ideal platform to release music videos (which the major record labels are desperately trying to monetize), as well as other short-form reality programming (think Fox’s “American Idol”) that’s likely to attract the 22 million youngsters in the MySpace community… an audience that happens to also watch MTV.

No matter what you may think of Rupert Murdoch, he never overpays and you can’t underestimate his brilliance. After all, he challenged the 3 major TV broadcast networks by creating Fox, then he challenged CNN by launching FoxNews, and he’s currently revamping FX with a slate of edgy original programming to go against HBO. I believe he’s now going after MTV, and if indeed that was his reason for buying MySpace, not only was it another brilliant move by the media mogul, but the price he paid was a bargain.

Robert Young is a serial entrepreneur who’s currently focused on Weed (www.weedshare.com), a digital music service and P2P superdistribution pioneer. During Internet 1.0, he orchestrated the sale of Delphi Internet Services to Rupert Murdoch’s News Corp.

  1. If this is the case, which does make sense, the new entity needs a different name. “MySpace” is a terrible name, especially if there is to be a cable channel in the works. Hell, even “Facebook” is an improvement, but that would be a terrible TV channel name as well. Good luck with that one, News Corp.

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  2. Why Rupert Murdoch Bought MySpace

    Robert Young thinks that Rupert Murdoch bought MySpace in an effort to compete with MTV in the new media space. I’m not entirely sure that I buy Young’s argument, but it’s compelling. Short-form programming is definitely here on th…

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  3. He almost overpaid on Pointcast. Idealab was just too wrapped-up in the bubble mindset of the time to accept the offer.

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  4. [...] and compete against the 24-hour news networks like CNN and FoxNews.” From Young (on Om Malik’s blog): I’m willing to bet that he will go even f [...]

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  5. A Rival To MTV

    Speculating on the reasons that News Corp (NYSE: NWS) bought out Intermix (AMX: MIX), with their hot social networking website, My Space. Robert Young speculates that Murdoch Co., may be preparing to launch a competitor to MTV, owned of course,

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  6. Ypulse Essentials

    Free the ‘Brats’ (an L.A. Times, reg. required, writer accuses ABC’s brat camp of teensploitation…I also keep reading news stories about teens on the show getting in more trouble…) – Help is in your hand (or your thumb. Ypulse reader…

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  7. Not sure if the purchase of Pointcast would have been overpaying. Think of how many people loved Pointcast, and how it could be used nowadays as a cool RSS reader, or content delivery system for such an MTV/Fuse type channel on MySpace.

    I agree that it would be an odd name for a channel, but it isn’t much worse than Current.

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  8. [...] e he will use his acquisition of MySpace to compete against MTV head on, as I speculated in my previous post here ). By integrating content and distribution, Murdoch has built a [...]

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  9. [...] annt zu haben. Gerade für Independent Labels ein interessanter Kanal. Es scheint an dem Gerücht, dass Fox mit dem Kauf von Intermix Media, dem Betreiber von MySpace.com, eine [...]

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  10. [...] annt zu haben. Gerade für Independent Labels ein interessanter Kanal. Es scheint an dem Gerücht, dass Fox mit dem Kauf von Intermix Media, dem Betreiber von MySpace.com, eine [...]

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