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27 February 2008

MySpace planning move into crowded music market

More and more candidates are trying to topple iTunes from its digital and mobile music throne, and the latest is social networking site MySpace, part of Rupert Murdoch’s News Corporation. The company will have an uphill battle, launching after several other services from big names, and at a time when its own core platform is losing ground to Facebook. Also, given that Warner Music has blacklisted Nokia MusicStore because of concerns about the potential for illegal content exchange on the handset maker’s own social network site, Mosh, MySpace may face its own hostility as it tries to negotiate deals with music publishers.

Details are sketchy so far, but MySpace seems to be relying on two differentiators ‘ an early focus on mobile carriers, and an emphasis on selling merchandise as well as tracks, an approach that could bring it into conflict with online retailer Amazon as well as the music download services. Among these, Apple iTunes is the clear leader, with Nokia making progress in the handset world, despite Warner’s opposition; some of the carriers announcing their own systems, many based on the Musicstation platform; and the Rhapsody/Verizon/MTV service and Sony Ericsson PlayNow on the horizon.

MySpace Music would offer both premium MP3 downloads as well as free, ad-supported streaming content and would be structured as a joint venture between MySpace and content providers like (News Corp hopes) Universal Music Group, Warner Music Group, EMI Group and Sony BMG Music. Talks are underway, and according to reports, other ideas include a music merchandise service and a paid subscription option optimized for certain portable devices.

MySpace will also seek to build on its alliances with mobile operators, where it has been losing some ground to Facebook ‘ for instance, a year after it created an optimized version of its service for Vodafone, the carrier did a similar deal with its rival. Vodafone already has two major music offerings, its own and Nokia’s MusicStore, but other cellcos are less advanced and might be open to making use of the MySpace branding as well as pushing its free content approach as an alternative to premium iTunes.