Much has been said about the joint venture announced between MySpace and the major labels (minus EMI, although they will almost certainly jump in at some point), but I’ve been sitting on this and wanted to think about it before a few days before commenting.
This deal has the potential, and I stress potential, to completely change the game. The labels have been slow to adopt new technologies and business models (if they have at all), and this JV is an obvious recognition by the old powers-that-be that times are indeed a changin’. Of course, the Universal lawsuit against MySpace was recognition too, but it was the typical, counterproductive kind…”No fair! Gimme gimme gimme!” instead of “how can I constructively participate and in the process save my own skin?” To be fair, the outcome of the lawsuit is pretty progressive, and it represents a recognition that participation in new models will be more valuable than fighting them.
We perceived an industry-wide shift towards this recognition at SXSW this year, so the MySpace deal doesn’t necessarily come as a HUGE surprise. What does come as a surprise (to me anyway) is the foundation that’s being laid over at the new MySpace Music. Total independence from MySpace with direct reporting into Chris DeWolfe. A brand new executive team. Some kind of enhanced product offering that empowers artists to do more (the details are a little vague, but it sounds like some type of sales capabilities will be involved). All this could potentially lay the groundwork for something completely game-changing…a digitally-savvy entity with forward-thinking management that is tapped in to millions of independent artists worldwide that can also monetize the years upon years of recorded music that is owned by the major record labels. This company could position itself as the music business of the future.
There’s are a few things that need to follow for that to happen.
1. Every artist uses MySpace; no one likes it. It’s time to give My Space Music a makeover. It’s terrificly difficult to navigate and it looks god-awful. Music is art, and musicians are artists. Products like Indaba Music and Virb that are well designed for creative people do a much better job building brand equity with their content providers than MySpace does.
2. MySpace needs to give artists more. Of course, MySpace has built a big business offering artists promotion and distribution only. But if it wants to be a next-generation music company it needs to offer artists more value – creative services, tools that help artists grow and build a fan base, tools that do a better job helping artists forge meaningful connections with their fans, just to name a few.
3. MySpace needs to demonstrate significant focus on independent artists. This JV was a settlement with the labels over the usage of major-label content, but the vast, vast majority of artists on MySpace are independent (I’d love to see a comparison of MySpace pageviews derived from indie content vs. major label – if there’s one out there someone please let me know). So far we haven’t heard anything about what this new company is going to do for the armies of artists that have nothing to do with the major labels. In fact, this is probably the farthest the majors have ever ventured into indie territory, and there’s a serious possibility of alienating independent artists and driving them elsewhere. This relies partly on marketing execution, but it also has real implications for MySpace’s product development, a lot of which overlaps with #2 (above). Despite the serious problems with major labels, most indie artists still aspire to get signed and make it big. However, an increasing number of indie artists aspire to stay indie and make it big before needing a label. MySpace needs to involve indie artists and show them what the majors can offer them even before the strike it big. This way, the indie artists that make up the bulk of the MySpace network won’t be driven away.
#1 really shouldn’t be a hard for a company like MySpace. Then again, it’s almost always been the small, nimble companies that have built elegant platforms (maybe with the exception of Apple). #2 and #3 are not going to be as easy. Artists are a fickle bunch – they’re tough to woo, they vary in terms of their technical capabilities, they often have many layers of difficult handlers to deal with, and so on. Add this to the potential (and I stress potential) downsides of a close partnership with major labels, and the situation is even more difficult. Someone is going to make it happen though, whether it’s MySpace, a conglomeration of smaller companies, or some other large company. We’ve started down this exciting road at Indaba Music, but everyone has a long way to go.