Interesting MySpace article in the LATimes.com today.
Some highlights:
“Facebook’s online clout is giving it an edge among major brand advertisers. Market researcher eMarketer projects that worldwide ad spending with Facebook will reach $605 million this year, up nearly 39% from last year.If that happens, Facebook will surpass MySpace, which will see revenue drop 21% to $385 million, eMarketer projects.”
“We need to be a platform for self expression that is clearly differentiated from the competition”
“The online social network … will use information that users volunteer on the site … to recommend movie trailers, recently released songs and video games to them.”
Yikes … I knew MySpace was imploding but I didn’t know things were this bad. According to this article, FB is effectively 2x MySpace in terms of visits and time spent and analysts are projecting a 21% decrease in topline revenue for the once dominant social networking site. Worst of all, I’m not sure I understand this new strategy of “entertainment + creative expression”.
For one, MySpace, to my knowledge, owns little to no actual entertainment content, so its value is principally as a distribution platform for content. Last time I checked – the platform with the most users (and the one that is growing) is the one who wins. Additionally, part of the revised MySpace strategy appears to be around leveraging behavioral targeting to support a CPA/Affiliate-model based on driving sales of movie tickets, music, video games, etc. The problem is that the high-value users with purchasing power and disposable income left MySpace a long time ago—and 13 year old kids in Middle America don’t have credit cards.
Ultimately, if you’re a content owner/producer, why would you choose MySpace as a distribution partner over the other options you have? Unless they’re offering you very favorable economic terms, you probably wouldn’t.
As far as creative expression … I dunno. Isn’t FB’s standard (clean) UI part of the reason why users fled MySpace in the first place? Does anybody really want to look at ANY web page that has white text on a yellow background, repeating tile gifs, plays horrendous music on load and takes 17 minutes to fully render?
But playing armchair quarterback is a coward’s pursuit. What should MySpace have done and more importantly, what should they do going forward?
The article suggests that the execs think ‘mission creep’ was the problem. From my view, more precisely, this was about pursuing the wrong mission. It would seem reasonable that in a highly competitive space, with extremely fickle and transient users, the company’s efforts should have been directed towards increasing switching costs while providing high-utility. It seems to me that there was a great opportunity to innovate on product and create social interaction-driven versions of old internet tools like messenger, chat, email, and audio/video/media players. The power and usefulness of such products would have leveraged MySpace’s greatest asset – its HUGE lead in # of users – and made it more difficult for competitors to encroach.
Bottom line: it was just too easy for users to leave MySpace.
Going forward requires some more thought. Look out for Part II.
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