MySpace Considering Charging For its Streaming Music

In an effort to bolster sagging revenues and make up for an ad deal with Google that expires later this year, MySpace is considering charging for its streaming music section. The music section is the most heavily viewed area of MySpace.myspace considering charging for its streaming music myspacemusic2 sl072409

The website Side-Line is reporting that MySpace is currently spending upwards of $20 million on streaming royalties. Other reports contradict the figure, but there is no question that the music service is losing money at an alarming pace, and things are only going to get worse.

In 2006 when MySpace ruled the social networking world, Google agreed to $900 million deal to place search ads within MySpace. The contract expires in August, and while negotiations are currently underway, any new deals would likely not be anywhere as close to the original.

In 2008 MySpace officially surrendered the crown of social networking king to Facebook, and in 2009, News Corps.- the Rupert Murdoch owned corporation that owns MySpace- was forced to admit that the website could not generate the necessary traffic to honor the full deal, which lowered the income by $100 million. If a new deal is not signed, MySpace could be losing more than $300 million in revenue, but regardless of any new agreements, MySpace will soon lose a huge stream of revenue.

MySpace is currently in discussions with Google, Yahoo, and Microsoft about new search advertisement deals, but there are rumors that MySpace may soon be up for sale, which could further complicate the future of MySpace. MySpace Music is the most successful portion of MySpace, and is responsible for driving the majority of the traffic required to fulfill the search agreement with Google. If the site does begin to charge, the traffic will slow, which further jeopardizes any potential deals.

In an odd twist, Techcrunch.com has reported  that MySpace UK has seen its traffic halved in the past six months, and that rival Facebook is helping keep the site alive as its third biggest referrer of traffic. MySpace UK has denied the drop in traffic is nearly as bad as reported.

No word on what the cost would be for a subscription model to the music site, or when this may happen. Regardless, things are not looking good for MySpace, or for the scores of smaller musicians that have begun to rely on MySpace to help get their name out.

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