MySpace Music will run instream audio ads sold by national Internet radio sales company Targetspot. According to reports, the audio ads began running last week for advertisers like Turbo Tax and Office Depot. The ads are inserted after a listener hears one song, and can be followed by a complete album or up to 100 songs on a playlist without another interruption.
Targetspot has announced that this is an exclusive deal that adds MySpace Music’s audience to a network that includes AOL, CBS, Yahoo!, Slacker and Live 365.
Since MySpace Music’s launch in September 2008, unique visitors to the music.myspace.com subdomain have increased 190 percent — growing from 4.2 million unique visitors to 12.1 million in June 2009. Year-over-year traffic to the URL has increased 1,017 percent. Since June, MySpace acquired social music site iLike, and later added imeem to its platform as well. MySpace Music was an announced key partner in Google Music’s music discovery platform.
This is great news for CBS backed Targetspot, and for the Internet radio industry. Last fall Pandora announced that they were beginning to air instream audio ads. It’s important for the development of a successful business model for Internet radio that key platforms like Pandora and MySpace Music contribute to creating that business model by running audio ads and creating more and better opportunities for advertisers on their platforms.
News Corp owned MySpace will purchase independent online music service Imeem, in a deal which is reported to be $1million in cash. Imeem has been in financial trouble for a while, and has run through an estimated $30million in investor dollars.
Among the investors, all four major record labels, although earlier this year Warner Music wrote off its investment in the service. In 2007, Imeem became the first ad supported on-demand online music service to negotiate deals with all four major labels. Those deals included equity which made partners of the four major labels. MySpace also has partnership deals in place with the four major labels.
A few months ago MySpace acquired online music service iLike, with 50 million registered listeners, for a reported $20million. Comscore estimated that Imeem had 16 million unique visitors in September. It’s impossible to compare these two numbers except to say that it doesn’t sound like Imeem is a lot smaller than iLike to me.
MySpace now owns two of the five online music services that announced partnerships with Google’s new music platform. The way that works is that Google drives traffic to partner sites who play the music and pay the royalties.
Recently Spotify delayed their US launch due to problems negotiating a license for ad supported on demand streaming with the record companies. Plug that info into the fact that Imeem was about to get acquired by MySpace for so little, and it’s easy to understand why Spotify is meeting with some opposition. Seems like the record companies want to limit their exposure on the ad supported revenue model…
Spotify, the European on-demand music streaming service that has taken Europe by storm, will apparently delay a US launch. For several weeks now there have been reports that the major labels were putting pressure on Spotify to abandon a free, ad-supported streaming model. The New York Times recently reported that major labels, already involved as backers with free ad-supported services like MySpace and Imeem, aren’t eager to license their catalogs to Spotify on that basis.
And they have a lot to say on the matter. “On-demand services have to negotiate private deals with the labels – there is no compulsory license, and the deals are not public.” according to David Oxenford a legal expert in streaming audio licensing.
But how much is the new Google music platform impacting this? Google Music is now driving listeners to Imeem and MySpace/iLike – the two services that are licensed by the record labels to stream on-demand. With that deal in place to support the two services that the record labels are already invested in, would they want to see Spotify come in and disrupt the market for on-demand services? Given some time, and the preference they’re getting from Google Music, Imeem and iLike (owned by MySpace) should be able to build their brands as destination sites for on-demand music.
Instead, the record companies would like to see Spotify offer their service on a premium basis, to those that subscribe. “We like Spotify as our partner in Europe, but we would like them to move more toward a paid subscription environment,” said Thomas Hesse, president of global digital business at Sony Music, as reported by the New York Times. Word is, Spotify is not happy about coming to the US with a paid-only model, hence they have delayed their launch.