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ON:MySpace Moves Into E-commerce

gravatar
 · 
September 6, 2006
 · 
2 min read

Music Store Called a Logical Next Step for Social-Networking Site. The decision by MySpace to add a music store --
and test its e-commerce legs -- has analysts and industry watchers
asking one question: What took so long?

The new feature lets the site's independent and signed musicians sell
their work directly from their MySpace profile pages, and it is being
supported by a relationship with Snocap, a copyright-services company
co-founded by Napster creator Shawn Fanning.

Launching pad for local
MySpace now hosts more than 106
million profiles, including roughly 3 million musical acts that post
tracks online. By allowing users to self-publish, MySpace has become a
launching pad for small local acts, as well as a place where national
movies and artists can be promoted.

As long as songs for sale do not violate a copyright, artists
and labels can set their own price and let MySpace members buy songs
the way they would on iTunes. The service is in trial and will be
available broadly by the end of the year.

Gartner analyst Mike McGuire said the move is a natural next step for MySpace. "It's kind of a no-brainer," he remarked.

A first step
It is a first step into e-commerce for MySpace,
which until now has relied on ads and sponsor partnerships to generate
revenue. Also, Fox Interactive parent News Corp. recently struck a $900
million deal with Google to provide search on sites like MySpace. That
deal is likely to generate far more revenue that any e-commerce deal in
the near term.

"By introducing a powerful commercial tool set into the
industry, we expect to see artists translate their community reach into
sales," said Chris DeWolfe, CEO and co-founder of MySpace.

The songs, which initially will be bought through credit card or PayPal
accounts, will be delivered in an MP3 format. That is compatible with
most digital-music players, including the popular Apple iPod. The new
online music store is likely to appeal to many unsigned artists, but
its appeal to labels is questionable because the music store will not
attach files that restrict how the downloaded songs can be used.

Napster connection
Snocap, a 4-year-old San Francisco company
that manages a registry of copyrighted music, will operate the software
behind the online music service. Snocap was co-founded by Mr. Fanning,
known best for launching the Napster file-sharing program in 1999,
sparking years of controversy over the fair use of copyrighted music.

Last week, Universal Music Group and SpiralFrog announced they
will make UMG's catalog available for free so long as consumers are
willing to sit through a host of ads.

ON:MySpace Moves Into E-commerce via @jpenabickley
Tagged: digital music · eCommerce · myspace · napster
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