Upping the Ante

MySpace Dives Into the Online Music Wars

By Matt Parish

Since its start in 2004, MySpace has grown from upstart Friendster rip-off to the rumbling behemoth of Web 2.0 that it is now, on par with Microsoft’s takeover of home computers in the ‘90s or AOL’s once-proud reign over the world of dial-up connections. They’re huge, and their only shot at remaining relevant is to gobble up schemes pioneered by smaller, enterprising companies and programmers.

They’ve spent the last six months picking off features from Facebook (constant friend updates and a sleeker homepage), YouTube (more flexible video features) and blogging sites. Now it seems like they’ll be focusing future efforts on free music distribution. Specifically, they’ll look toward that brand of free, ad-supported distribution that sites like Imeem.com and Last.fm have been fighting for since their

launches years ago.

CBS’s U.K.-based Last.fm stands side by side with Imeem at the front of the pack, boasting powerful corporate backing since their $280 million buyout and recently earning a huge jump in site activity after successfully negotiating licenses with all four major labels (Imeem beat them to that

punch last December).

The important thing for all sites like these (including Pandora, Slacker and Deezer) is that they offered an all-encompassing and highly personalized way to listen to and discover brand new music.

With the rise in popularity came increased scrutiny from the legal departments at the major labels and the RIAA. They lost their last appeal last year and fines dating back to the beginning of 2006 were due at the end of January. As royalty payments become more solidified, it will be the ones with the deepest pocket books who find themselves in the best position to ward off the growing legal costs and licensing fees.

But it looks like whoever makes it through is going to have a new competitor. Rumors began circulating in late February that MySpace was exploring options for a revamped “MySpace Music” feature revolving around a free music service and DRMfree downloads. The skeletal, hazy plan making its way across blogs involved a scheme similar to that of Last.fm and Imeem — license music from all major labels and dole out payments based on revenue split from ads connected to the music.

It’s no joke that the site’s 110 million users eclipse Last.fm and Imeem’s numbers of around 20 million each, but not everyone was optimistic out of the gates.

Leslie Poole, the CEO of the company in charge of payments through MySpace’s Snocap stores (the current model of forpay music on the site), came out publicly against the plan. “The bottom line is that while free music is nice, people want music when, and how, they want it, and ad-based models can’t provide that experience,” he toldWired‘s Listening Post blog. Of course, chances are that Poole’s arguing for Snocap’s future—ifMySpace Music moves into DRM-free downloads as well, where does that leave their current tool? The situation can’t be helped by Snocap’s mid-February sellout to Imeem.

MySpace faces legal hurdles, too — they’re still embroiled in a lawsuit over copyright infringements with Universal, who’s made the issue a major negotiating point, according to Digital Music News.

If Myspace has proven anything, it’s that it’s is a survivor. It’s wallowed through problems with spambots and server errors and the last year of net snobs writing death certificates for the thing on behalf of Facebook. So despite Last.fm’s CBS backing and Imeem’s immense network, both will probably be the underdogs soon. We’re hoping the oncoming battle with MySpace’s model doesn’t force the rest of the field to leave independent artists out in the cold.