SNOCAP, the service that lets artists register their songs and sell it directly to fans on the Web, inked a deal with News Corp's MySpace this week. The deal is designed to allow MySpace's 3 million bands to sell their music.
SNOCAP, the company founded by Shawn Fanning after Napster was flushed down the toilet, will need about 4 million songs to be downloaded per month in order to break even? Possible? Who knows, but with MySpace's 107 million members and counting that shouldn't be too hard. The MySpace artist chooses how much he or she wants to sell the song for. Of that amount, the artist gets more than 50%. MySpace and SNOCAP split the rest, with MySpace taking a bigger chunk.
I mentioned before how powerful MySpace is and will continue to be. Think about what this deal will do to the indie record label and artist. You have a free website a la MySpace where you can do all your promotions, create hype, build a fan base; that’s your Marketing department right there. Now you can sell music via download on the free MySpace site; that’s your distribution channel. The evolution of music. What do you need Universal or Columbia for?
Not that this deal alone will scare the bejesus out of the major labels but we are witnessing the evolution of the music industry. The major labels know that there chances of finding great talent is like a gajillion to one. It's like Russian Roulette to them where they will sign a bunch of talent hoping one of them will turn into an Usher or a Beyonce. The labels lose millions because of this so that's why they take a huge portion of the artist's money to recoup their losses. So how does a company like Universal make money? Distribution. Threaten their distribution and well, put two and two together. Remember Napster? The labels weren't enraged because of copyright issues, please! The labels were worried that their distribution model was in jeopardy. If you are an artist and you want millions of records sold you have no choice but to sign a deal with a major label because they controlled music distribution, but now MySpace is allowing the artist to sell their music through the website.
Does this really impact the major labels? Not necessarily. The Big Four record labels (Universal, Sony, EMI, Warner) control 80% of the worldwide music industry so this deal won't be anything more than really small sneeze in their realm. As I mentioned earlier, most artists and bands suck, no question. So if your local Lemon Swirls band wants to sell their music on MySpace, believe me, Diddy is not crying over it. But what if the Lemon Swirls were the next Maroon 5, the next Metallica? That's millions of dollars of lost revenue that could have been pocketed by one of the Big Four! That's what they should be worried about.
Let's face it, MTV is not what it used to be. If you watched the ever-boring VMAs then you know what I'm referring to. MTV and even radio are not breaking acts as they once did; MTV has more TV shows than music videos and radio has more commercials than music. Could MySpace be what these two powerhouses once were? With MySpace you have the freedom to CHOOSE who you want to listen to. And, I keep going back to it but MySpace has over 100 million subscribers, that's almost 2% of the entire WORLD'S population! Ok, maybe it's not so dramatic.
MySpace Music isn't going to cripple the music industry anytime soon, but Tom and Chris are thinking outside the box. Don't expect them to make millions from this new deal, but hey, what is it costing them? Call me crazy if you'd like but MySpace and Google are the future of BUSINESS.
