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Monday, October 6, 2008

Business vs. Filesharing

posted by on October 6 at 15:55 PM

Forbes has an interesting (if you’re a nerd) interview with’s Chief Operating Officer Spencer Hyman. Among other things, he gave a succinct breakdown of the finite means by which revenue can be made off of music on the Internet.

There only are a limited number of ways you could make money. It’s advertising, it’s subscriptions, it’s e-commerce and then its using the data for smart purposes [market research].

The interview is mainly about verses Myspace, as the latter recently launched its new Myspace Music function.

One of the big stories with MySpace Music was whether streaming the music legally would be successful in driving song purchases via downloads. How’s it fared for you?

When we launched free on-demand earlier on in this year in the States, the amount of e-commerce we were generating more then [sic] doubled. It definitely does work.

Legal, free streaming is a newer phenomenon on the Internet. What’s the issue?

We always said to the labels, “You have to let us do this,” because what’s happening at the moment is people are getting the recommendations off of and then they’re just going to all the illegal peer-to-peer sites.

They’re more than familiar with that problem. What’s the state of the digital music business today?

I think what you’ve got with the Internet is the fact that the labels and the collective side have realized that they need to make sure there is proper sharing of all the revenues which are generated with all the content creators. And I think that’s correct. I think the problem, though, is that there is a lot of posturing going on, on both sides, as to what the right model is to monetize that. The [potential] market is huge, but at the moment, it’s all on the peer-to-peer networks.

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