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MySpace Music - show me the money

• Rory Cellan-Jones
• 25 Sep 08, 12:21 GMT

The man on the phone was very enthusiastic: "It's a landmark product." Really? "It's very, very exciting." I'm sure. "It's the biggest new launch we've done since we started..." Wow. "It's about empowering people. It's going to be a massive, massive success from day one..."

So what was getting the MySpace executive quite so animated? Yes, you guessed it, another music service. Forgive me if I'm not quite as overwhelmed as the social network appears to be, but hardly a day seems to go past without the launch of another offering that is going to revolutionise the fusty old music business.

Still, MySpace music, which is launching in the United States now and Europe later this year, does have one thing that some other newcomers lack, a ready-made audience of eager music fans. Just about every band, signed or unsigned, has a MySpace page, and its 120 million users are right smack in the middle of the keenest music-loving demographic.

From now on, as well as being able to befriend their favourite bands, MySpace users will be able to stream their entire catalogue, create ring tones from songs, make play lists to suit any mood, and share it all with friends.

But, to coin a phrase, show me the money - where's the payback for MySpace and the music industry? Advertising is the answer for the streaming service, with businesses like McDonalds and Toyota piling in. But there will also be a revenue stream from downloads, provided in the US by Amazon's MP3 store. (Bizarrely, MySpace couldn't tell me what those downloads would cost, insisting that was up to Amazon).

It's what you might call a "free first, pay later" strategy. In that, it's similar to the service launched by last.fm earlier this year. A spokesman for that "social" music service, now owned by CBS, called me this morning to gently suggest that MySpace's offering was a rather tired imitation. "They don't have a core of passionate music fans like we do," he said. "And they're not providing a way to navigate and filter all this content in the way that we do."

I think MySpace has a different problem. Surely its users are the very people who have grown up with the idea that you "share" music, rather than pay for it? It's the MySpace generation which has ushered the music industry into the digital era with this depressing sum: Falling CD sales + paid downloads - filesharing = plunging profits.

MySpace is taking the optimistic view that people would love to pay for music if only it were not so difficult: "Most people don't want to steal from their artists," the over-excited executive told me. "But they do want it to be easy and simple to purchase." I'm not convinced that it's so hard to pay for music downloads right now - after all, as I pointed out to Mr MySpace, even a crumbly old has-been like me can just about manage to type in a credit card number and press download when buying that Cat Stevens or Bruce Springsteen album.

Maybe MySpace Music will prove a great marketing tool for the four record labels who've signed up and maybe it will make MySpace a more "sticky" place as the social network competes with Facebook. But will it really convince young music fans that it's worth paying for tracks that they can get elsewhere for nothing? Don't hold your breath.

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