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@ EconMusic: How Will MySpace Music Make Money, Courtney Holt?

imageDuring the Keynote Q&A at our EconMusic conference, everyone asked MySpace (NSDQ: NWS) Music President Courtney Holt the same question in different ways:

How is the much-hyped music portal going to be profitable when it has to compete with free services like Pandora, illegal file-sharing sites and torrents, and of course, the nasty economy?

A number of strategies: Holt named display ads and sponsorships, of course, but also revenues from the Secret Shows, affiliate sales (from sites like Amazon) and eventually merchandising deals. And despite the fact that parent company News Corp. swung to a loss in Q4, Holt said he was “optimistic” that MySpace Music would deliver revenue. “I’m being very sober about how we’re going to get there, but my goal is to run a profitable business,” he said.

Why MySpace Music and not Facebook? Analysts expect advertisers to slash social media spending this year, but Holt said MySpace Music will fare better than pure-play social nets because the opportunities it offers brands — like the Secret Shows, the offline ticket sales, and even possible content deals on MySpace Video — “aren’t subject to social network CPMs.” For example, a recent promo that plugged overlay ads into a My Chemical Romance video netted click-through-rates that topped 1.2 percent; the links sent viewers to the band’s site and **, driving traffic and sales (though Holt wouldn’t disclose financials).

Money in the data: Holt also said the site has a data goldmine that brands, artists and the labels all want access to: “We know whether someone has friended an artist, whether they listened to them on the band page, or their friend’s page, whether their friends are listening — and artists that engage will get access to that data.” He added that MySpace Music would share some of the data with users too, as part of efforts to streamline music search and site navigation.

Coming soon: Holt said the site was enhancing user playlists: letting users display 100+ songs on their profiles, making the playlists public, and SEO-friendly; he also said collaborative playlists were on the horizon.

The rest of our coverage is at our EconMusic channel

5 Responses to “@ EconMusic: How Will MySpace Music Make Money, Courtney Holt?”

  1. To criticize but offer no solutions isn't worthwhile. My biggest fault with Myspace Music is that they haven't really built a brand. We all know what MTV and iTunes are, but what exactly is Myspace Music? I couldn't really tell you. Is it a new music player that allows streaming? Well. people have been streaming music on Myspace as long as it has been around. Nothing new there! They say it's about selling downloads, but, their music store, isn't showing a significant increase in downloads as a result of their joint venture with Myspace Music (at least from their 4th quarter '08 numbers). Myspace Music wants to sell tickets and merch…well good luck to that with the merger of Ticketmaster and Live Nation.

    When people think of buying music online, they still think of iTunes. I would like to see Myspace Music start to do things that will help establish them as a music brand by taking some bold steps. They have some real opportunities, but they never seem to take advantage of any of them.

    To that end, one thing that I think would be interesting to see Myspace Music do is harness the power of music and social media to help struggling communities in this economic downturn. I would love to see Myspace Music partner with the record companies that are part owners, its sponsors – Toyota, McDonalds, AT&T, Walmart, etc. on a major concert initiative called "America Rocks: A Day of Giving." As we all know, with the economic downturn, community food banks and other charitable organizations are strapped for donations. I would like to see Myspace Music and Myspace, in partnership with their sponsors, put on a single day of concerts in cities like LA, NY, Austin, Nashville, Atlanta, and New Orleans, etc., with the theme being "help thy neighbor." Myspace Music would ask major music artists in hip hop, R&B, pop, rock, and country to take a day out of their summer tours to do a show for expenses only. Show ticket prices could be 35-50 bucks (reasonable), with all proceeds going to benefit community organizations that are in dire need of donations. Corporate sponsors would underwrite the shows, so the shows could make significant donations to community organizations, and increase the awareness for the need to donate to them, or volunteer for one if you are unable to donate. They could webcast the shows with sponsor ads and PSAs about organizations that people can donate to or join, and even sell the TV or DVD rights. Myspace's core audience does care about community and giving back (just ask Pres Obama), so this would be a fun and relevant way to connect the Myspace Music sponsors with Myspace users (that's much better than a free weekly download). Myspace, the artists, and sponsors all get massive good press. No, it won't save the world, but it can help some people in need, and people can have a good time.

  2. Its the usage data, silly – they can show ads all day long to these kids and not see the ROI but mine their minds and you'll have the ability to sell them things and songs.

    If the heads of MySpace Music dont see this opportunity they should bow their heads in shame and wiggle back to where they came from