MySpace’s MP3.com Moment

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File this one under helping people help themselves: News Corp.’s MySpace.com has cut a deal with Snocap, the entertainment industry’s preferred Shawn Fanning project, to enable bands to sell their music on the site. That part of the story is familiar to anyone with a dot-com memory long enough to remember Michael Robertson’s MP3.com, a site where countless unknown bands (and a smattering of former hitmakers) posted tracks and peddled CDs. The estimated 3 million musical acts with MySpace sites have the same fundamental problem as the ones on the original MP3.com did: with no money for marketing, how do they draw an audience? A preference engine would help, but sadly there’s no such thing yet at MySpace -- just a way to sort artists by genre and locale, the latter of which often has no relationship to the band’s true hometown. The needle-in-a-haystack problem may be even bigger for indie bands on MySpace than on MP3.com because of the former is crowded with major-label artists.
One difference now, however, is the potential for viral sales forces on MySpace. Many of the personal sites on MySpace stream music from the owner’s favorite band of the moment. Snocap’s technology will let those folks sell their favorite band’s music, too. Given how important word of mouth is in building an indie band’s audience, this could be a real boon to upstart and niche acts. But there’s a problem here, as well: unlike the typical online music store, which keeps 10 cents to 30 cents per track sold, MySpace and Snocap are reportedly demanding a 45-cent cut. So much for selling tracks for a quarter. Here’s hoping there’s more pricing flexibility than initially reported. Otherwise, indie bands might feel compelled just to give away their songs. That’s fine for bands that make their living on the road, but not so swell for those that can’t or don’t.
It’s also interesting to note that MySpace and indie bands have no qualms about selling tunes in the unprotected MP3 format. When, oh when, will the major labels be willing to do the same with their permanent downloads?