Since its formation, MySpace has continued to be profoundly influential in the music industry. Millions of people flock to the networking website daily to listen to music and discover new artists. More specifically, A&R scouts are searching through MySpace religiously to find the most popular unknown artists. However, as the site has continued to grow, it has managed to keep the major record labels at bay and create a forum for all record labels to have a voice. It has not been until recently that News Corporation-owned company decided to make an alteration to its music website and enter into a deal that gave major record labels a strong stance in the music portal. Naturally, independent labels are opposed to this new joint venture between MySpace and the major record labels.
On Thursday, September 25, the MySpace Music service was launched, modifying almost every part of the site and including the majors in the event. The new music service contains many new features like streaming of full artist catalogues. Additionally, MySpace changed the site layout to allow more artist features, artist updates to fans, and the ability of fans to add the music they like to their own playlists. In time, the site hopes to add functions that allow fans to purchase tickets and merchandise online and the addition of new music on a regular basis from the major labels.
Myspace decided to include the majors in order to gain preferable licensing terms to the music. The four major record labels and publishing group; Warner, Universal Music Group, Sony BMG, EMI Music Group, and Sony/ATV Publishing are all participants alongside independent distribution groups ADA, Fontana, Red, and Caroline. The independent distribution groups, which are primarily owned by the major record labels, are only a small fraction of the many independent record labels and digital music companies that were allowed to join the new venture. There is strong opposition from independent groups because this gives a lot of control and influence to the majors in a previously egalitarian format. While money is being allocated to all the major companies and service providers, independent labels, artists, and unsigned artists will have no say or cut in the growing music networking site.
A majority of the money gained from the new music service will come from advertising. Each artist will be paid on the basis of how many plays they receive. The majors, because of the new venture, are said to take as much as 40% of the revenues (billboard.biz). Eventually, MySpace will outsource other sales, like ringtones and physical purchases, to companies like Amazon, Jamster, and many others. The fight by the major record labels to take in a cut of revenue from the music service still continues.
By Ardie Farhadieh