In its second-largest acquisition, Amazon buys the company for $970 million.
The social network giant has partnered with Amazon.com and major music labels. And it starts with a built-in base of music fans who flock to millions of bands on MySpace.
MySpace is seeking to cut into the virtual lock Apple’s iTunes has on the digital music downloading business. The social network giant today launched MySpace Music, a download store designed to play to the network’s immense following of younger music lovers. MySpace members not only can buy music, they also can stream it for free as they browse the advertising-supported shop.
MySpace Music, located at MySpace.com/music, has recruited the four major music labels and others as joint venture partners. The big four are EMI Music, Sony BMG, Universal Music Group and Warner Music Group; the other music partners are Sony/ATV Music Publishing and Orchard, an aggregator of independent music. MySpace describes today’s launch as phase one, to be followed by the addition of more content and features in the future.
Amazon.com, No. 1 in the Internet Retailer Top 500 Guide, is taking the lead in e-commerce. MySpace members in the U.S. can purchase music downloads through MySpace Music, with the purchases handled by Amazon’s digital music store, Amazon MP3. Adjacent to licensed songs within artist profile media players, user-created playlists and certain music editorial pages, MySpace Music features Buy buttons that allow users to download and purchase MP3s playable on all digital music devices, including the iPod. The downloads are free of the digital rights management technology that prevents some digital music, including that from iTunes, from being copied over and over.
“Amazon MP3 makes it easy for customers to discover, buy and play music wherever it’s most convenient for them-whether they are shopping on Amazon.com or on MySpace, where tens of millions of music fans go to discover new music,” says Bill Carr, vice president for digital music and video at Amazon.com. “With MySpace Music we created an integrated way for customers to purchase Amazon MP3 downloads without leaving the MySpace Music discovery experience.”
MySpace Music now is an affiliate in the Amazon Associates affiliate marketing program and receives a referral fee on sales.
MySpace starts with a solid following of music lovers. Five million bands and solo artists, from garage acts to mega-stars, have a presence on MySpace, according to the social network. The profiles section of MySpace Music provides a vast collection of songs, music videos, tour dates, blogs and photos.
“This is a good way for MySpace to monetize its massive amount of traffic. They do advertising, but music downloads are a more direct method, and they fit the network’s customer base very well,” says Maris Daugherty, senior consultant at J.C. Williams Group Ltd., a retail consulting firm. “It will be interesting, though, to see how MySpace differentiates itself from iTunes. For example, unlike iTunes, MySpace has the media platform to hold event-based music launches with a built-in audience of millions. MySpace generates media and excitement for musicians and their music.”
Apple is No. 7 in the Internet Retailer Top 500 Guide.