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Summary:

Updated below: Fortune gets a first crack at doing a story on MySpace Music, which is launching in its new avatar next week. And while the N…

Updated below: 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. Imeem has been doing that for a while since December, with all the four majors, as a point of reference.
— 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 will 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. Update on this: I spoke to a source which says penny per song is not an accurate number, but the numbers are more based on revenue share, ad sales, and branded environments.
— 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?

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  1. The MySpace sale button which you refer to downloads the track into the iTunes player for easy iPod upload but is still an Amazon sold track thus undercutting the iTunes strangehold.

  2. It's only a matter of time until easy-to-use ripping programs are spread near and wide to disrupt the need to actually buy the track. Then what?

  3. Myspace Music looks great, however, right now I'm using http://www.deezer.com/en and it's AWESOME! A huge catalogue, a great interface, and quite good focuses on emerging artists! Great!

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  5. I think they have got one thing very much right here. That is free music and on screen ads. I believe the music industry is losing the war against people obtaining music free now, an indeed this is a trend for all digital products. I think the solution has to lye in using revenue from advertising to attempt to monetize the music. As for the downloads, the key is probably to make the price cheap enough that the convenience factor outweighs other means of obtaining the music.

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