Back in September we reported on Justin “I Don’t Make Music Anymore” Timberlake’s latest role as the public face of the new-and-improved MySpace. A memo that leaked this week offers more details about the company’s future plans; Spotify and Pandora‘s PR teams should take note.
Interactive Media Holdings (née Specific Media) purchased the property from News Corp last summer, jazzed it up and prepped it for a sorely needed relaunch: Despite the fact that traffic on the site went up by 36% over the past twelve months, MySpace is on pace to lose approximately $40 million in 2012–and organizers expect it to lose at least another $25M next year.
According to the leaked pitch materials, the folks at IMC are “holding out” for another $50M in capital so they can officially re-launch MySpace as a Spotify competitor by making use of what they call the “worlds largest music library of 42M songs and 100K music videos” and its “direct relationship with 5M artists”. How do they plan to do it? By starting a subscription model in 2013 and offering users not only streaming mp3s but music downloads, “artist merchandise” and “event ticketing” services. In other words, MySpace looks to become the one-stop shop for all things related to pop music.
It’s true that MySpace already has more members in the US than Pandora or Spotify, because most members never bothered to delete their profiles. The company also appears to have a cost advantage over its supposed competitors:
A large portion of the music on MySpace comes from unsigned artists, so the site pays nothing to host it–and its owners also currently pay “radio rates” on the vast majority of its label-owned tracks while Spotify pays higher “on-demand” prices. IMC also plans to promote the “interactive” nature of MySpace which allows artists communicate directly with top fans (or hire interns to do it).
Will this plan work? MySpace’s (overly optimistic) organizers predict a 1000% rise in revenue by 2015. We’re skeptical, but we will say one thing: get ready for lots of promo campaigns. Mr Biehl is already on the case.