Labels dissatisfied with MySpace Music performance

The good news for MySpace Music is that its record label backers are pleased with the traffic the site is attracting. The bad news is that the 8-month-old service has yet to turn that big audience into big dollars.

Some of the record labels have told Courtney Holt, MySpace Music president, they are disappointed with MySpace Music's revenue.

(Credit: MySpace)

At a MySpace Music board meeting last month, the company's CEO, Courtney Holt, got an earful from several music label representatives, according to multiple music industry sources. "Several key players were unhappy" with how MySpace Music was performing, said a source with knowledge of the talks. Some board members want MySpace Music, the joint venture formed by the four largest recording companies and News Corp., to make changes such as boost sales conversions and do more to integrate the service with the regular MySpace site, the sources said.

The meeting was designed to provide "open dialogue" and "constructive feedback" from the board to the service's managers, said a source. But another source described parts of the discussions as "tense." On Wednesday morning, a MySpace Music spokeswoman declined to comment.

MySpace Music represents the largest attempt so far to wed social networking to music. Some in the recording industry argue that MySpace and Facebook are choice areas for promoting artists and songs and MySpace has long been a place where bands showcased their songs. With Apple dominating online music retail, MySpace Music is seen as a potential new opportunity to generate sales.

At the very least, MySpace Music's sluggish performance illustrates how difficult that task is. Music consumption on the Web has really come down to two horses: iTunes and illegal peer-to-peer sites.

During the meeting, Holt conceded MySpace Music needed improving, according to the sources who spoke with CNET News. Board members understand that MySpace Music was launched only last September and that Holt, a former MTV executive, was named the site's president just five months ago. He impressed some of those present by promising that he and his staff are ready to make improvements, a source said.

One source said that all the labels appear "very confident" in Holt and "nobody is panicking."

The labels have been spurring Web music services to start generating profits. The record companies say they have offered price breaks and other concessions to help start-ups build audiences but they won't offer these forever.

The labels are telling companies that they want to see results sooner rather than later.

[nameistaken]

A lot of us don't want to buy anything from the big labels.
I am an Independent, do it all, write my own songs, play all my own instruments, do my own mixing and mastering, public relations...all of it! And do you know to sell online through 90% of these services I don't get even half of the money? The guys who record on the major labels make less on one song sale than I do AND THE LABELS SAY THEY WANT TO LOWER THE PRICES?
I don't agree with illegal downloading but it kind of seems like people who are, are only robbing the robbers.

[contentcreator--2008]

THE LABELS SAY THEY WANT TO LOWER THE PRICES? - you misread, see "The record companies say they have offered price breaks and other concessions to help start-ups build audiences but they won't offer these forever."

[Worf101]

The last desperate attempt of a dying model to save itself. Kids aren't buying records (just our Country Cousins or so it seems) and they've not found a way to make the web pay. Indie bands with dedicated followings are doing it all for themselves and don't need the record companies hands in their pockets. So now these desperate greasy men and women are screaming and hollering like frightened hogs, "we gave you cheap content now give us money. Save us from decades of greed and incompetence!!" I hate them all and hope they rot after a long and painful death.

Da Worfster

I run an internet radio station, MGZC Radio (www.live365.com/stations/mgzcm), where our creed involves playing the lesser heard and/or unsigned artists in the downtempo/loung/electronic/dance genres (the "other" tunes).

I too have '5' bands (projects) that I promote on my own as my past experience (in the mid 80's) with record labels was an exercise in futility. The liked our music but wanted total control. No thanks!

MySpace is old hat and MySpace Music is not going to work while there are many overseas sites that can provide free music because of the disdain for American copyright law.

The record labels are done and they know it. MySpace Music is too little to late.

[ryokowerx]

This is a familiar tune...

No immediate massive profit = failure to these executives.

Sometimes you have to look at the long tail rather than if you're going to be able to afford the third Ferrari this year.

So... yeah... not a lot of sympathy for these money-grubbing idiots. They obviously didn't get the memo that their business model has failed and they're now dinosaurs.

[Renegade Knight]

Yeah, it's rough when everone else doesn't work as hard as you would like them too. If I recall the big labels aren't doing that hot on their own. They should keep in mind the old adage "every little bit helps".

[knowles2]

May be there just problem with site, well there is one big problem with it actually, I go there and I rarely fine the songs I want, I go to a illegal sites and the songs, solve this problem and I and other people might buy a song. Also a next if a russians cans sell songs for 10p-50p an still pay copyright holders and music artists then the rest of the industry should be able to do the same.

[Zaunto]

The big labels seem to have were fooling themselves if they thought that Myspace Music was going to make them huge profits in this economy. Besides, everyone knows that Myspace fell into bed with the large labels. Who cares? I'm an independent artist like others here. I write, record, and produce my own music too. The money isn't made on records anyway. It's made on touring. Record companies don't invest in anyone's touring, so why do they think they should reap profits from Myspace Music? Last time I checked, the RIAA wasn't distributing any of the money they've won in lawsuits, to any of the artists who they claim to be "protecting". The music biz suits are no better than the Wall street suits. We are not "bailing" them out.

[drronsuarez]

A important issue to consider is brand dilution if you're relying on MySpace, iTunes or any one or two big retailers. A common theme I have heard repeatedly at conferences this year like Midem and Digital Music Forum East is that the greatest results are produced from artist branded sites that keep it simple. The user experience is then to be able to focus on the artist's content and not be subjected to epileptic seizure causing flashing ads.

For artists to be successful in the continually emerging new music industry, they need to create and maintain their brand on their own website, and in addition sell everywhere through distributors like Tunecore. An artist or preferably, those working for the artist, must create and build a unique brand for the artist. The recent success of the electronic music DJ Deadmou5 is not just his talent, but his unique branding which us unforgettable and easily recognized.

I've heard artists proudly say that they are now in iTunes, the same way that in the past someone might have proudly told others that they got signed with a Label. Well, just getting into iTunes is no guarantee of any sort of results. My company, Loud Feed has lots of competition in a relatively new space which is heating up. That space is targeted more to the individual artist or net label sites that are going after many niche markets, rather than a huge common destination site like MySpace. <a href="http://loudfeed.com">Loud Feed</a>, offers artists the ability to sell from your own branded web site and virally distribute widgets for your fans to promote and sell your music, tickets and merchandise on social networks and blogs. What needs to become huge is the glue that connects little networks, where people really do know each other and real live people act as connectors across those various networks. Clay Shirky has discussed these "connectors" in his book, "Here Comes Everybody." Offerings like Google Friend Connect show a lot of promise. You can create connections across many small networks, e.g. friends on various Wordpress sites that are focused on an independent artist or net label.

In 2007, the staff at Loud Feed were hired by Tunecore to write the software at the core of Tunecore's distribution engine, which delivers music into iTunes, Amazon MP3, Emusic, Rhapsody and many more online retailers. Today Loud Feed offers artists the ability to <b>sell from their own branded artist site or widgets and make 100%</b>. Our business model as an engineering company is to offer a white label technology solution to artists, labels and distributors. We simply put a margin on bandwidth usage, while taking 0% of your music sales. That makes us more like a utility company, where you're only paying more if you're using more electricity.

[cheriejd]

You can only be so late to the party. MySpace could have been the hugest thing out there if they had started this when they started the music area of the site. Instead they gave everyone the chance to get used to going elsewhere and the artist were linking to many other sources. So, amazingly, people go elsewhere.

[scooter1960]

Radio missed the same opportunity too! Like the labels, Radio suffers from the same defend the fort kind of thinking. Instead of innovate! When you're fat and happy and arrogant. somebody sneaks up from behind you to steal your cheese.

[Ucimb4u]

Ultimately, it's impossible to compete against free downloading alternatives the kids have gravitated toward. Legislate the shutdown of Bittorrent search engines like isoHunt and others and perhaps a monetization system will work. Sadly, no one really respects the copyrights of the music business (enought to legislate). But boy, wait until the sales of Hollywood movies in DVD form tank because of free torrent downloads the kids are doing (there are 21 million peers are sharing nearly 2 million files through search engine isoHunt alone). It will take an unprecedented sag in DVD sales to get the free content grab under control. There is a content war going on right now and technology is winning.

[scooter1960]

Shutdown bittorrent, uh?? There's an army of programmers and raving fans, who're are crafty and innovative when it comes to opening new sites! They'll work hard and for nothing, just because they can! Welcome to the new world order... Go ahead shutdown bittorrent down..