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MySpace to challenge Spotify with mobile subscription service for 2013

Tom Pakinkis
MySpace

A MySpace mobile subscription service will launch in Q2 of 2013 with an e-commerce solution for music downloads, ticketing and merchandise planned for the second half of next year.

That’s according to a leaked investor presentation acquired by Business Insider, which also places the relaunched social music platform in direct competition with Spotify and Pandora in the near future.

The Interactive Media Holdings/Specific Media presentation says the MySpace owner intends to raise $50m of new capital, $10m of which will go towards the marketing of the new MySpace, $15-25m towards renewing rights with labels and $15-25m will go towards general working capital purposes.

The presentation also reveals projected financials with Interactive Media Holdings predicting that the platform will make $15m in revenues this year, up from $9m in 2011.

MySpace made a loss of $40 million in 2012 and could lose another $25 million in 2013 according to the documents.

The leaked documents also suggest that the MySpace company feels it has an advantage over the likes of Spotify and Pandora when it comes to streaming costs since it pays “the lower Radio rate on the vast majority of label related song plays” but around 50% of its overall song plays come from unsigned artists.

Spotify, on the other hand, it says, pays the On-Demand rate to labels while Pandora also pays the lower Radio rate but that applies to the majority of songs played on its services.

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Tags: streaming, spotify, Digital, subscription service, Myspace, Mobile

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