During the Keynote Q&A at our EconMusic conference, everyone asked MySpace (NSDQ: NWS) Music President Courtney Holt the same question in different ways:
How is the much-hyped music portal going to be profitable when it has to compete with free services like Pandora, illegal file-sharing sites and torrents, and of course, the nasty economy?
– A number of strategies: Holt named display ads and sponsorships, of course, but also revenues from the Secret Shows, affiliate sales (from sites like Amazon) and eventually merchandising deals. And despite the fact that parent company News Corp. swung to a loss in Q4, Holt said he was “optimistic” that MySpace Music would deliver revenue. “I’m being very sober about how we’re going to get there, but my goal is to run a profitable business,” he said.
– Why MySpace Music and not Facebook? Analysts expect advertisers to slash social media spending this year, but Holt said MySpace Music will fare better than pure-play social nets because the opportunities it offers brands — like the Secret Shows, the offline ticket sales, and even possible content deals on MySpace Video — “aren’t subject to social network CPMs.” For example, a recent promo that plugged overlay ads into a My Chemical Romance video netted click-through-rates that topped 1.2 percent; the links sent viewers to the band’s site and *Amazon.com*, driving traffic and sales (though Holt wouldn’t disclose financials).
– Money in the data: Holt also said the site has a data goldmine that brands, artists and the labels all want access to: “We know whether someone has friended an artist, whether they listened to them on the band page, or their friend’s page, whether their friends are listening — and artists that engage will get access to that data.” He added that MySpace Music would share some of the data with users too, as part of efforts to streamline music search and site navigation.
– Coming soon: Holt said the site was enhancing user playlists: letting users display 100+ songs on their profiles, making the playlists public, and SEO-friendly; he also said collaborative playlists were on the horizon.
The rest of our coverage is at our EconMusic channel