Digital Media

NEW YORK--"The music business discovered data only to show how bad it was getting," MySpace Music President Courtney Holt said in a talk on Tuesday morning. "The first time I was asked to get data when I was working at Universal (Music Group) was, 'How many songs are being stolen?'"

Holt was speaking at an event called the New Music Seminar, a day-long conference geared toward the artist side of the record business. The angle of the event was dealing with a paradox that has emerged in the past decade: the Internet has launched so many new channels for independent artists to emerge, but it's also become flooded with so many of them that it's not much easier for a band to make it big. And though Holt, who was the keynote speaker at the conference, talked more about his experiences as a music industry veteran than he did about his relatively new gig at MySpace, he did drop a few tidbits.

Most specifically, he talked about his faith in the unprecedented levels of data and statistics that the digital age can bring to the music industry.

"It's more interesting to me when an artist is being 'playlisted' than played," he said, adding that a very popular MySpace Music user can have as much reach and influence as a terrestrial radio station, and that MySpace wants to track exactly who those key influencers are. "The sharing of the music is, to me, a better way to understand virality and interest than just a passive play."

MySpace Music, a free streaming audio service, was launched by the News Corp.-owned social network just under a year ago, and Holt was installed as its chief early this year. News Corp. reportedly plans to convert MySpace into an "entertainment portal," now that Facebook has solidly eclipsed it in the social-networking game. MySpace has other issues, too: a recent management shuffle that installed former Facebook exec Owen Van Natta as CEO, significant layoffs, and reports that the music labels were dissatisfied with the performance of MySpace Music.

Interestingly, Holt was quick to characterize MySpace Music as an independent entity. "MySpace Music is a joint venture that was formed last year. We are an independent company that is still owned in part by MySpace, but we have our own staff," Holt explained at the New Music Seminar event. "Defining who we're really going to be as a business is helpful, and I think there's been a lot of confusion."

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.

Courtney Holt

(Credit: MySpace Music)

MySpace Music, the digital music service for the News Corp's social network, has finally named a leader.

As first reported by CNET News on Friday, MySpace Music has hired Courtney Holt, an MTV exec and a longtime digital music veteran as president of the digital music service, the company said Tuesday.

Holt is expected to start work on January 5, the company said in a statement. MySpace Music went through a long process to hire a chief, with at least one candidate backing out at the last minute.

"Courtney understands how to successfully blend technology with music and the resulting new business opportunities born from such a combination," said Chris DeWolfe, MySpace CEO.

Holt was executive vice president of Digital Music for the MTV Networks.

Courtney Holt, an MTV executive, will be named as president of MySpace Music, possibly as early as Monday, according to a source close to the company.

MySpace Music is the digital music service formed by News Corp. and the four largest recording companies. Some observers say that MySpace, with a well-established history of offering music, could emerge as a competitor to Apple's iTunes.

CNET News first reported that Holt was offered the job last month. He has long been a fixture at the intersection of digital technology and music. Currently, he is MTV Networks' executive vice president of digital music and media. Previously, he was senior vice president of New Media & Strategic Marketing at Interscope Geffen, and before that he was head of New Media at A&M Records.

Holt could not be reached Friday evening. MySpace declined to comment.

Launched in September, the service features downloads of MP3s and ad-supported streaming music. What was missing was a CEO. As the search for a chief dragged on and candidate names came and went, observers began asking whether anyone wanted to steer this ship.

MySpace Music is also expected to announce a new ticket and merchandising initiative, the source said.

Courtney Holt, MTV's chief of digital music, has told friends he will accept the job as MySpace Music's new CEO, according to a source close to Holt.

His name is not yet on the dotted line, but Holt has given a verbal commitment to MySpace CEO Chris DeWolfe, said a music industry source. MySpace Music is the newly launched digital music service formed by News Corp. and the four largest recording companies. The service will sell downloads of unprotected Mp3s and offer ad-supported streaming music.

"Anything can happen when there isn't a signature, but it looks like he's the new CEO," said the music industry insider.

I realize I've written the story of MySpace Music's prolonged CEO search into the ground since reporting last week that Holt was offered the job. But here's why: beyond MySpace Music, there doesn't appear to be any serious iTunes challengers coming down the pike. None of iTunes previous challengers came from social networking or started out with an audience the size of MySpace's. Holt appears to be the new CEO so we might as well start sizing up who he is and whether he has the vision to help develop an iTunes alternative.

What I find laughable is hearing DeWolfe say that MySpace Music isn't competing with iTunes.

"I think (Apple is) focused on selling devices, and that's why I don't think they're competitive to us," DeWolfe said during a panel session at the Web 2.0 Summit on Thursday.

Yes, Apple has sold a lot of devices, but iTunes has also sold more than 5 billion songs. Fact: anyone selling digital music obtained from the major labels is competing with iTunes. The digital music store is the No. 1 music retailer in the country offline or on. Come on Chris, you're guy Courtney isn't leaving MTV just to take on iMeem. The brass ring in this contest is taking down iTunes, or more realistically, snatching away a few percentage points of market share.

What Holt brings with him to the job, if not a marquee name, is plenty of experience with digital music. Before moving to MTV, Holt was senior vice president of New Media & Strategic Marketing at Interscope Geffen and head of New Media at A&M Records. He's well respected at the major labels...especially at Universal Music Group.

It's interesting to note that both Interscope and A&M are owned by UMG, the largest recording company. Will Doug Morris, UMG's CEO, have more influence over MySpace Music's direction than the chiefs of the other labels?

DeWolfe said during the conference that MySpace interviewed about 40 people for the job and that the company made only one offer. He told the audience "We're very confident that we'll be able to make an announcement in the near future."

MySpace Music is getting closer to finally finding a CEO.

Peter Kafka at the blog All Things Digital is reporting that negotiations between MySpace Music and Courtney Holt, an MTV executive, are all but finished. Kafka writes: "At this point there doesn't seem to be anything left beyond 'i'-dotting and 't'-crossing."

Last week, we reported that MySpace Music offered Holt the vacant CEO job. On Tuesday, I reported that Owen Van Natta was a top candidate until bowing out relatively late in the process.

The newly launched music service is hosting a party in San Francisco on Thursday. Will this be Holt's coming-out party?

Two months ago, MySpace Music appeared ready to fill its CEO position. The new music service had whittled down the candidates to Owen Van Natta, the former Facebook executive, and Andy Schuon, a longtime music industry insider.

So how did MTV executive Courtney Holt get the job offer? As first reported by CNET News last week, Holt was offered the job to help operate what some expect will be the most significant iTunes challenger to come along in awhile. According to music industry sources, Holt has yet to accept the job as he and MySpace Music continue to wrap up negotiations. A MySpace Music representative didn't respond to an interview request.

Leading up to Holt's offer, Van Natta, who announced his departure from Facebook in February, pulled out of the running late in the process, said two sources with knowledge of the negotiations. According to them, MySpace CEO Chris DeWolfe had favored Van Natta over Schuon.

MySpace Music has been widely criticized for taking so long to name a chief. For now, DeWolfe and his MySpace team continue to oversee the service.

Last week, TechCrunch reported that Van Natta was no longer a candidate and offered no explanation as to why. The blog did suggest that some within MySpace's management may have been discouraged by some of Van Natta's side deals. Even as Van Natta was interviewing for the job he was trying to encourage MySpace to buy Project Playlist, a fledgling music service with a copyright lawsuit hanging over its head that Van Natta has a stake in, according to the blog.

Van Natta was unavailable to comment so we don't know for sure why he pulled out. What is known is that the job has some unappealing elements.

One former candidate told me the MySpace Music CEO will be required to answer to another CEO, DeWolfe. The source added that the compensation being offered was mediocre. There's also the question of Facebook's growing dominance over MySpace.

(Credit: MySpace)