For Musicians, MySpace Is Site to Be Seen and Heard

The five members of the 88, an independent rock band from Los Angeles, thought a single on “The O.C.’s” soundtrack and a performance on late-night TV’s “Jimmy Kimmel Live” would win them fans. They were right. But the fans didn’t share much of that love until the 88 hit MySpace.com.

The popular online hangout featured the band on its front page, where the 20 million members sign in. The 88’s songs were streamed to users’ computers nearly 70,000 times last month, and 17,000 people added the band to their list of friends. As word spread around the website, hundreds of messages a day -- example: “u kids rock like madd” -- began pouring in from places as distant as Malaysia.

“There were a lot of people who had never heard of us before,” said the 88 pianist Adam Merrin. “It was a great way to build anticipation for our upcoming record.”

Music has helped MySpace generate Web traffic that rivals some of the Internet’s titans. More than 350,000 bands and solo artists, from the unknown to the famous, have set up pages on the website to let people sample and share songs, exchange e-mail with the bands and see tour dates. Bands such as R.E.M., Weezer and Black Eyed Peas have streamed new albums on MySpace for a week before the records hit stores.

There’s more to do than listen to music: Users spend hours on the site writing blogs and e-mail, reading classified and personals ads, playing video games and chatting with strangers.

Each new page seen gives the Santa Monica-based company a chance to show more ads. Only Web giants Yahoo Inc. and Microsoft Corp. displayed more online ads in May than MySpace, according to research firm Nielsen/NetRatings.

It hasn’t been all smooth sailing for MySpace. School officials and child advocates have warned that children can easily stumble across -- or hunt down -- frank sexual discussion and other inappropriate material on sites like MySpace. Company executives say such problems happen on any large Web community; they don’t censor their members’ postings except for hate speech.

MySpace is also linked to an alleged spyware company. Intermix Media Inc., a Los Angeles-based company recently sued by New York Atty. Gen. Eliot Spitzer for allegedly planting malevolent programs in games and screen savers, owns half of MySpace (Intermix and Spitzer have reached a tentative out-of-court settlement for the company to pay $7.5 million).

Nevertheless, MySpace has become the flavor of the moment among teenagers and young hipsters, vaulting to the top of the heap of social-networking companies.

Such companies, including Friendster Inc., persuaded Web surfers to create detailed profile pages and invite friends to join them. The problem was that people had few reasons to stick around long or come back.

Former top dog Friendster’s woes became clear in May, when former NBC Entertainment President Scott Sassa resigned as chief executive after only a year on the job. The site’s traffic has plunged in the last year.

Meantime, MySpace has vaulted into the Internet’s big leagues, at least by some measures. Its U.S. users looked at 3.9 billion pages in May, boosting the site to sixth place on the Web, according to Nielsen. The companies ahead of it are the Web’s biggest players: Yahoo, EBay Inc., Microsoft, Google Inc. and America Online.

Of course, the Web giants are big moneymakers. It’s unclear whether MySpace is cashing in on its success: The company’s founders won’t disclose its finances. But MySpace has discovered a way to keep people coming back -- music.

“They’ve found a new niche,” said Gerry Davidson, senior media analyst with Nielsen. “It’s taking a step beyond just social network.”

MySpace was launched in September 2003 by entrepreneurs Chris DeWolfe, the company’s chief executive, and Tom Anderson, its president. They had sold a previous company to Intermix Media (then called EUniverse Inc.) and took an undisclosed investment from the company to get MySpace off the ground. They bought the myspace.com domain from a defunct online data-storage company with plans to turn it into “a portal around a person’s social life,” DeWolfe said.

The site’s music section started modestly, with mostly unsigned bands creating pages for themselves. As some of those bands signed with record labels, Anderson said, they demanded that their contracts included a promise to market on MySpace.

In September, rockers R.E.M. became the first band from a major record label to stream a whole album on MySpace before its release. Several bands followed suit, including the hip-hop group Black Eyed Peas, whose members had been using MySpace to meet people and find parties while on tour.

In one three-month stretch, Interscope Records debuted music from the Black Eyed Peas, Queens of the Stone Age, Nine Inch Nails and Audioslave on MySpace.

“In every instance the records debuted with the artists’ biggest one-week debuts,” said Courtney Holt, head of new media and strategic marketing for Interscope. “MySpace played a role.... They’re one of the most vibrant music communities online.”

That’s one thing drawing Michael Anthony Hermogeno, a 34-year-old professional photographer from Glendale, to MySpace. His profile photo, which shows him with a Mohawk haircut, is a magnet for MySpace users looking for new connections. He has nearly 23,000 “friends” in his network and says he spends at least five hours a day on the site -- drumming up business, talking about off-road driving and discovering bands whose CDs he might want to buy before they get big.

“You’re talking to them on MySpace and two months later you see them on Fuse TV or MTV,” he said. “It’s crazy.”

Even as record labels struggle against file-sharing services that allow users to trade pirated music, their willingness to stream songs and sometimes whole albums on MySpace for free suggests that there’s more than one way to satisfy the market’s hunger for free tunes without destroying the industry.

The industry’s hope is that fans find music they like on sites such as MySpace, tell their friends, then buy the music.

“What they’re trying to do is turn their fans and consumers into marketing and promotional tools,” said Michael McGuire, a research director with research firm GartnerG2.

MySpace has attracted such advertisers as Procter & Gamble Co. and Sony Pictures. “All the Fortune 500s are trying to reach this elusive 16-to-34 category,” DeWolfe said.

But analysts say the next step is for MySpace to make money on the transactions its content inspires, such as concert ticket sales and paid music downloads. DeWolfe said the company was pursuing e-commerce and also planned to make money through premium services.

So far, MySpace has remained largely untainted by its affiliation with Intermix. The companies maintain separate offices, salespeople and boards of directors, DeWolfe said.

In fact, its ownership stake in MySpace appears to be giving Intermix a boost. After Spitzer sued Intermix in April, shareholder Brad Greenspan wrote a scathing letter to company executives complaining about their business practices.

But, he concluded, at least they were smart enough to invest in MySpace.