Record labels also baffled over how to make money on social networks
With Facebook and MySpace accounting for two of the top 10 Internet spots in the U.S., the music industry is grappling with how to make money on social media.
Mike Jbara, chief operating officer of WEA, Warner Music Group's domestic sales and marketing company, today told those attending the music retailers' annual conference in San Diego that social networks present an opportunity to reintroduce consumers to the habit of buying music.
"It looks like social media is competing with peer-to-peer (file-sharing networks) and we all have an interest in turning that into an appropriate revenue opportunity, given that it's substantial," Jbara said.
So far, that secret formula has proved elusive. Panel after panel addressed the question of how to monetize social networks, but offered little by way of concrete success stories of bands converting Facebook fans to song buyers.
Many digital media experts extolled the power of social networks as powerful marketing platforms. But that's not exactly what the music industry needs -- new and innovative ways to give away its music online, in the hope of one day cashing in.
"It remains to be seen if it's going to be successful in that capacity," said Adam LaRue of IndieClick, who consults with major and independent labels in developing online strategies for artists.
The most advanced experiment to date, the MySpace Music service started in a joint venture with the major music labels, has yet to live up to its hype as a one-stop shop for music fans.
Alicia Yaffe, director of digital media at Rocket Science, which provides music label services, put it this way: "MySpace's new music service is taking a lot of time to get off its feet."
-- Dawn C. Chmielewski