MySpace, the former social networking monopoly and now a media experiment co-managed by film star Justin Timberlake, will attempt to raise $50 million to enter the music streaming business and compete against existing players Spotify and Pandora.
The plans for the capital raising were revealed through a leaked media presentation, which also showed the company lost more than $US40 million in 2012.
However, there are surprising signs of health – revenue rose from $US9 million to $US15 million, and traffic is up by 36% from last December.
The company also maintains deals with the four major record labels, and relationships with more than five million artists, fuelling its latest plans to transform into a streaming music platform. An extra $50 million would go a long way in helping that plan come to fruition.
Since News Corp sold MySpace to Interactive Media for $US35 million, analysts have been watching and waiting to see what the company can do with the damaged brand. Taken down by Facebook, the company’s name conjures thoughts of a time before modern social media – an antiquity.
But the company has managed some surprises, especially with a recent, snappy redesign that focuses on personal discovery of music, a simplistic design and high-quality photography.
Interactive Media says in its presentation that MySpace has some solid advantages over Spotify or Pandora, in that it pays a cheaper rate for songs played. Additionally, MySpace has a huge collection of unsigned artists who account for half the music played on the site.
It also claims the site is the fastest-growing top-50 site in the United States.
MySpace is a long way from its $US580 million sale price six years ago. But there are some signs here that MySpace could actually create a viable streaming music product – all it may need is a little push.
This story first appeared on SmartCompany.