Last week guest blogger Bill Houghton of BroodingSavage.com called ad supported music unsustainable. (read here) Some readers strongly disagreed and I published a rebuttal from Marc Cohen of Ad Supported Music Central. (read here) Today Houghton returns to take on MySpace Music and the on-demand music sector.
Several companies, including LastFM and Imeem, are attempting to build advertising supported music services, and now MySpace has announced intentions to enter the fray. Lets be clear about one thing… these companies are not offering "free" music. They’re offering free on-demand radio. There’s a big distinction.
First, there are already niche players like Last.fm and Pandora, and I applaud these services - especially the service they provide to Independent artists. But music streamed from a website is not very compelling if I can’t take it with me, collect it, and keep it as part of my personal history. Streaming music through a website is not the type of innovation MySpace needs.
Second, it's not certain that MySpace can even make this business work. News Corp can’t even sell it’s existing ad inventory on the site -- falling short by about $4 billion. MySpace has an estimated 2.4 trillion ad impressions annually, but no ability to monetize them. A music service will simply add additional unsold inventory to that overstock. The result will be MySpace eating the cost of the music licenses, or the devaluation of their ad inventory to near $0. (Michael takes his argument further in a two part series on BroodingSavage.)