Social network MySpace, once one of the biggest social networks on the Ínternet, is in the process of lobbying for $50-million to re-launch the service and serve as a direct competitor to music streaming services Spotify and Pandora next year.
The re-launching plans have been uncovered by Business Insider, who obtained documents detailing their plans to raise funds and re-launch.
News Corp, who owned MySpace, sold the network to Specific Media for $35 million – only six years after buying it for $580 million. Specific Media changed its name to Interactive Media Holdings and received funding and investments from various sources, including pop star Justin Timberlake. After gaining investors, Interactive Media Holdings redesigned the site.
“Specific Media took a hit as ad buyers turned to real-time bidding solutions over traditional ad networks. Revenues declined from $42 million in 2011 to a projected $35 million in 2012 — both down from a high of $60 million in 2010,” Business Insider wrote.
And this is where the $50-million re-launch comes in. In documents obtained by Business Insider, it was revealed that “Interactive plans to use most of the money to re-launch MySpace as an alternative to Pandora and Spotify. Of the $50-million, $10-million will go to marketing, $15–$25 million will go to licensing deals with the music labels, and another $15 to $25-million will be reserved for ‘general working capital’.”
It was also revealed that it plans to launch a music subscription business for mobile in the second quarter of 2013.
MySpace is confident that they will be able to take on music streaming services Spotify and Pandora, as they will be paying labels a lower rate for song plays and 50 percent of the music played on MySpace comes from the 27 million songs from unsigned artists who make use of the service.
Charlie Fripp – Consumer Tech editor
