We all had a groovy profile, and an even cooler background – our own place on the web.
Long before the likes of Facebook, twitter and Pinterest were even thought of. As we are well aware, and as Tom quite thoroughly evaluated (flattery gets you nowhere, Chris), MySpace made a comeback earlier this year. Re branded, fresh faced, and ready to take on the might of the social media giants. It may look the part, but there is no escaping the fact that a company sold just a few years ago for $580 million, is today only producing annual revenues of around $15 million…the mind boggles.
Have you bothered to spend any length of time on the site? No, me neither. So it’s all well and good, but are the new owners really thinking MySpace could once again dominate online social interaction. Well it seems they do, in fact they arête try insistent on it. They do however have a small problem, finding the money to finance such a push to the top of social conscience. So what are we talking here, a couple of million? No, more like $50 million.
The company is in need of $50million in investment to make the dream a reality. The plan by the parent company (Specific Media) is to transform MySpace into a direct competitor of Spotify and Pandora. When you put it like that, it seems feasible, that such a large amount of money will be needed to quash the might of such well known house hold social platforms.
Don’t get me wrong, official published figures, seem to suggest that the new re designed MySpace is turning its recent bad luck around, with the parent company managing to increase year on year revenue from $9 million, to an estimated $15. As many of us know, however revenue does not mean profit. Estimates suggest that MySpace will make a loss of $25 million this year, which is down from $40 last year. Not a huge increase, but a step in the right direction. Traffic to the site is also on the up, rising my 36% in the last year alone, a sign that the message might once again be spreading, that MySpace is the place to be.
Ok, so back to the $50million needed from investors… What will this be used for, and how will it be spent?
- Specific media have said $10 million will be spent on marketing,
- $15-25m will be eaten up by music licensing deals from record producers.
- The remaining $15m investment will be used as general working capital, so in other words, exaggerated overheads, and even larger salaries.
So can it be done? Logistically and technologically yes, we are likely to see an alternative to Spotify from MySpace, but will anybody actually use it. Well that depends on a number of things ( price and usability being the main factors), but it is often the case that when in doubt users tend to be of the mind set “better the Devil you know”. So, stay tuned, as soon as the new, new MySpace goes live, we will have a comprehensive review, warts and all.