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Cisco's Eos Platform Could Challenge MySpace

cisco1Updated with comment from Cisco: Cisco (s csco) and Warner Music Group (s wmg) announced today that the music company will roll out a dozen new sites dedicated to its artists using Cisco’s Eos SaaS social entertainment platform by the end of this year, adding to the five existing Warner Music artist sites built on Eos. The move signals Warner Music’s satisfaction with Cisco’s social entertainment venture, which was widely considered a bad move for a technology company that’s made its name as a switch-and-router maker. And according to Dan Scheinman, senior VP and general manager of Cisco’s Media Solutions Group, the company plans to announce partnerships with other entertainment companies in the coming months — which could throw up a roadblock for MySpace (s nws) as it tries to regain lost momentum by reverting back to its roots as a niche site for music and entertainment.

Paramore_CroppedCisco CEO John Chambers told reporters that he believes the Eos platform will ultimately transform the entertainment industry’s business model by introducing new revenue opportunities online. For example, artists could offer exclusive merchandise for passionate fans on their branded sites that aren’t offered anywhere else. Warner Music Chairman and CEO Edgar Bronfman Jr. said one of its artists, the rock band Paramore, put together a limited edition box set of their latest album and other paraphernalia for $39.99 and it’s outselling their $11.99 standard CD album on the band’s site by a ratio of 13:1. Warner Music said its artists will decide which business models they wish to implement on their Eos-powered sites, but like Facebook and MySpace, an advertising-based revenue model would be standard unless an artist chooses not to place ads on their site.

Scheinman also said Cisco plans to offer the ability for entertainment companies to syndicate out content from its branded sites, such as a video stream, to pages and applications on Facebook and MySpace in a bid to attract even more traffic — which could make MySpace’s planned journey an even bumpier one. Update: Cisco emailed the following statement:

We believe Eos will be a platform to help M&E companies create powerful online consumer and fan experiences, and that these customer sites (like those from WMG) will coexist with, not compete with, MySpace, etc. We believe there is a place for both My Space and Eos-powered online experiences and sites. We are not after their business.

12 Responses to “Cisco's Eos Platform Could Challenge MySpace”

  1. I think the real reason Cisco is in this space (as in the social networking space) is because it such platforms are a great way to complete the unified communications picture in the enterprise. Cisco has voice, conferencing, Web Ex, interactive telepresence. Social networking software can operate as middleware to tie all that together with enterprise apps. Think of colleague feeds (as opposed to friendfeeds) that show who is posting documents what document, setting up which team call etc.

    Now, why they think they need to prove that they are in this enterprise social networking space by trying to be a player in the already crowded M&E space is another story….I give it 3 months tops

  2. As somebody who has used cisco products, I am very doubtful of their ability to execute in this space. Its just not in their DNA. What made them successful in routers simply does not translate over to this. It strikes me as a somewhat desperate move on Cisco’s part.

  3. How do kids connect with Paramore? Probably they go to the band’s MySpace profile. Or maybe pull up a YouTube video. If they want a single track, there’s iTunes. Or if they want to buy a CD online, they might go to Amazon, or they might get directed to the Warner-built site. On that site, they have a choice between $12 for the regular CD and $40 for the deluxe set. Amazon doesn’t sell the deluxe yet, and the regular CD is $18, not $12. So the pricing on the Warner site is better. The true believers, who will buy the deluxe, will go to the band’s (Warner’s) site. So it’s not surprising the deluxe is outselling the regular there. The overwhelming majority of kids will pick up a single on iTunes. Warner has its finger in all these pies, and is really doing quite well adjusting to the digital world – as one analyst put it, they’re now more like VCs for artists. Warner is hardly “tying its digital future to this Eos product.” The Cisco deal is only one of many avenues Warner is trying out. I’m no fan of big labels, but maybe these dinosaurs can evolve if they face brute reality with a sensible strategy.

  4. beachgal210

    Shame on Cisco for spending shareholder money on this business. Cisco needs to focus on products in which it has a competitive edge in, and will actually generate long term revenues and profit from. This is a total waste of cash resources in which Cisco could be spending in more productive and complementary businesses.

    Shame on Warner Music Group for tying its digital future to this Eos product. Since when did posting websites become a noteworthy strategy for a media company. I can’t even believe they would even pay for this technology in this day and age, much less give away revenue share. Decisions like this is why the music business is a dying entity.

    Shame on the media for continue to write articles on Eos. I swear I have heard about this Eos story for the last three years and it’s about time to focus on real news and real businesses, instead of recycled D-level gossip. They announce one customer relationship after all these years??? The whole buzz is around competing with MySpace and now Cisco announces they aren’t??? What’s the point of this news? I guess it’s true what they say, “it smells like a duck, and walks like a duck….”

    • Frank Rizzo

      Agreed. Time for Cisco to start paying a dividend. Just like Microsoft, no matter how successful you are, eventually you run out of smart things to spend money on. Better to pay a dividend than to spend the money on dumb things.

    • Agree – this is pathetic for a company like Cisco – they have gone they way of Web 2.0 hype PR machines.

      The Cisco Kid – the gorilla of networking / enterprise market; now peddling white label socialnet software masqerading as an Operating System.

      These shenanigans are about as goofy as it can get for a company like Cisco. And will probably remain so for a quite a while till they turn it off and call it End of Service (EOS).

      Shareholders should be concerned about Cisco Consumer Media initiatives – these PR campaigns have limited to no chance of translating into real earnings.