Indie Artists and Fans Unite: MySpace Listens and Changes its Service

In a previous blog entry I mentioned how MySpace had the ability to generate a huge amount of revenue for the struggling music industry with its new MySpace Music (see left below) service. Although the music industry would surely benefit from this service, the independent labels and artists were the ones hurt because they were left out of it. In the previous blog, I expressed my belief that MySpace was going to face negative repercussions for excluding independent artists from their new service; especially when independent artists were one of the biggest reasons why MySpace had become so popular. I mentioned that I personally believed that MySpace would change its service within a few days or weeks, to allow independent labels and artists back into the MySpace Music service. A recent article on StarTribune.com puts it best, "A month after irking part of the independent recording community by launching its online music service mostly with major labels, MySpace Music has made a deal to almost double the amount of indie tunes available through the service." MySpace finally realized that what they had done was not in the best interest for their company's image and profitability. They decided to listen to all the reports and complaints that people were having about this issue and make a change for the better. Although independent labels and artists are now happy to be back on the MySpace Music, the major labels might be feeling a little bit uneasy since now they will confront competition from the hundreds if not thousands of independent artists on MySpace.

The top major labels make up a huge percentage of all the music that is sold throughout the country but they depend on a fewer or limited number of artists to generate their revenue from. Although the major labels do not necessarily need the revenue that will be generated by MySpace Music, that revenue stream would be a great help for an already struggling industry. In a comment I left previously, I had mentioned that the music industry had already made $800 million dollars already on paper; well not the top record labels might be feeling a little nervous about the fact that no longer will they be the only ones getting a pay off from the MySpace Music service. As much as the top labels want the music industry to do well, they definitely do not like losing potential revenue to other labels and specially not independent labels. Although the top major labels will definitely cringe with this current development, the fans will definitely be ecstatic about the fact that they will once again be able to discover new and true raw music that has yet to be changed to fit into what is found popular by mainstream America. As I mentioned up above, MySpace Music decided to work a partnership with independent labels and artists, the big partnership was between MySpace Music and the independent digital distributor IODA. The IODA (see right below) is a distribution company that takes care of distributing, marketing, and other technology issues for all of its independent labels and their respective artists. MySpace Music having formed this relationship with IODA increased its independent labels on its service to the thousands. An article on Billboard.biz says, "MySpace Music's executive director of strategy and business development, Frank Hajdu, told Billboard.biz that MySpace Music is dedicated to the indie artist community." This comes as a shock since at first they denied all the allegations that they had left out independent artist out of their new music service when it fact they had; this quote does make independent labels feel reassured now that they will not be forgotten anymore. I personally believe that MySpace should be dedicated to the indie artist community because without them, MySpace would have never achieved the status and number of users that it has today.

As many expected it, MySpace ended up changing their whole service on October 23, 2008 in order to adapt to the true music culture that lives on the Internet, the independent non-mainstream music. MySpace would have truly lost its dominance in the social networking arena if it did not correct its mistake of not allowing other music on its service beside that of big record labels. MySpace had no choice but to listen to its users and a large group of artists in order to remain popular, which is really their first goal because if they are no longer popular no one would go to their site and in return there would be no revenue generated from music being played on their site. Independent artists in return now have a place once again where they can upload their music and create their fan base, they can market themselves and their upcoming shows which will lead to their popularity increasing among thousands of potential fans on MySpace. Now since everyone's needs and demands have been met to an understandable level, the top major labels earning revenue from their streamed music, indie artists being able to create and upload music; and fans being able to truly find diversified music in one location, the question that remains is whether this service will last in the ever fast changing online music distribution world or will it just fade away like many other services have before. Another question I raise is the fact that since independent artists will now have the chance to reach thousands fans, will they now become mainstream musicians or will they keep the indie vibe alive? I personally believe that whenever something gets mass media attention, it tends to loose its appeal to the people that live for underground, uncomercialed music. Once artists start making money, the also forget about their love for the music and it becomes merely a way of making money and getting rich. We will have to wait in order to truly see the effects that this music service will have on independent artists, but until then everyone can benefit from MySpace's change to its music service.

MySpace Music: The Music Industry's Saviour?

In my previous blog entry entitled, "Backstage Music: Analog to Digital Television: The End of Concerts and Live Sports Broadcasting?," I brought up the negative repercussions that the analog to digital transition was going to have on not only the music industry but the whole entertainment industry as a whole. This week I explored the blogosphere to discover one the options that the music industry was pursuing to generate more revenue, the partnership between MySpace and the top major labels: Universal, Sony BMG, and Warner, and the smallest major label, EMI. This partnership would create MySpace Music (see right), which would allow users to stream music for free in an ad-supported environment. Although the exact details of this partnership have not been disclosed, some in the music industry do wonder if the revenue generated by ads would be enough to warrant such a partnership were music is in fact given to the end user for no actual cost. MySpace Music also created a partnership with Amazon to offer users the ability to purchase songs directly from within MySpace Music, without ever having to leave the site. The files offered by Amazon (see left below) would be DRM-free and therefore be able to be used across any portable media player. I personally believe that users will not purchase any music from their store because of the fact that they can always listen to music for free online. MySpace Music is not pleasing the music industry as whole, the Indie Labels have felt betrayed by this new partnership with the major labels. Indie labels are accusing MySpace Music of not only leaving them out of this new service, but also going as far as not allowing them to upload original music which they own the copyrights to. I believe that MySpace Music is committing a big mistake by "kicking to the curb" all the independent labels and musicians which helped to create what MySpace is today. Independent labels and musicians do not have the resources as the major labels do, so they depend on word of mouth promotion and social sites such as MySpace to generate their fan base. Not only are the independent musicians being affected, but also the users because not everyone wants to hear generic mainstream pop music; and if only mainstream music is provided then users might feel the need to go elsewhere to listen to their music which in return would be a big hit to MySpace. I found two blogs that dealt with this topic, one being TechCrunch which has been featured on various news programs such as CBS, their blog entry entitled "MySpace Music Puts The Industry On The Right Track," and the other techdirt which specializes in analyzing different industries, their blog entry entitled "Independent Record Labels Missing From MySpace Music." In addition to posting my comments directly on these blogs, I have also posted my comments below.

MySpace Music Puts The Industry On The Right Track
Comment:
Hello Michael,
Thank you for such an informative blog post. I really appreciate the fact that you not only shared your personal experience with the new MySpace Music service abut also mentioned how this service is a good business model for the music industry. You mentioned, "That 40% may be worth as much as $800 million already, on paper at least," where is this value coming? I was also wondering what your view was on the reports that Indie Acts were being left out of this deal and more importantly, were no longer being allowed to upload their music to MySpace. I understand the fact that MySpace is a new medium, which everyone wants to use because of the huge number of users that it has, but do you think that traditional advertisement by the record labels will ever stop? Will artists solely depend on their MySpace page or will there continue to be posters and other advertisement or their new music? You mentioned that all music should be free because anyone can copy a song, but what about the people that still want to physically own their music or for those who want to purchase legal downloads; would these users really be interested in being restricted to only being able to listen to music online on services such as MySpace Music? If the new way to go for music distribution is free, do you believe that record companies will just altogether stop manufacturing actual hard copies and solely distribute on ad-supported services, and if this is the case would they be willing to keep partnerships with Apple and other paid services, when they can just make a bigger profit with ad-supported services and not actually have to give any products to the end-user. If this is the case the music industry will be able to generate more revenue, solely by eliminating the costs that come along with manufacturing, distributing, and promoting physical copies of CD's. Seeing them from the artist's perspective, I do not know whether they would be happy to put in so much hard work into their productions when in fact they would not be able to see their final products in brick and mortar stores. I think that there is some nostalgia that comes along with seeing your final product in stores and therefore musicians would push to keep that distribution channel open. I believe that only time will tell how the music industry overcomes the downfalls that the digital age has brought, and we will just have to see and wait how users will react to MySpace Music.

Independent Record Labels Missing From MySpace Music
Comment:
Thank you for such a concise article about the treatment of Indie Record labels by the new MySpace Music service. I agree with you completely that Indie Artist contributed a lot to the growth and popularization MySpace. MySpace used to be a portal for hundreds if not thousands of Indie Artists who wanted to expose themselves to the masses in order to create new fans, generate buzz, and sell their music. Many musicians did come out of their Indie phase and were shot into the mainstream music industry because of their MySpace pages. One example I can think of is OneRepublic, which had a MySpace artist page, which caught the attention of Timbaland. Now with the new rules that have been put into place, it seems like new Indie Artist cannot create or upload their music which means a lot of artists will not have the opportunity to be exposed to producers and fans, therefore cutting their chances of making it big in the music industry. I know a lot of MySpace users liked the fact that they were able to find new and unsigned bands, because they were able to offer music which was "real" and not part of mainstream. I was wondering if you believed this new music service was going to cause have any negative ramifications for MySpace, such as fans and users leaving their social website and going to another one or Indie Artists coming together and openly endorsing another social website such as Facebook. You mentioned in your post that after posting your article you received a call from MySpace insisting that your story was not true and that they were in fact still allowing the same freedom of their service to Indie Labels. I was wondering why MySpace keeps insisting that this reports of them not allowing Indie Record Labels to be on their service to be untrue, when a lot of independent and prominent news sources are reporting the same facts. Do you believe that the huge amount of interest in this topic has caused MySpace to rethink their agreement with the major music labels and to allow Indie Labels back on their service? Maybe the major labels are afraid of the competition and want to monopolize that service but I do believe that in the coming days if not weeks, Indie labels will again be a huge part of MySpace Music.