MySpace Music picks up more indie artists

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Better late than never.

MySpace Music tonight announced a deal with indie digital distributor IODA to bring its million-strong catalog of songs to the social network’s music-streaming service. That means artists such as Brazilian songstress Bebel Gilberto and Canadian rockers Tokyo Police Club will be brought into the fold.

MySpace wouldn’t disclose the terms of the agreement, as it’s still negotiating with other independent labels— including Merlin, which represents labels in negotiations such as these and counts among its board members IODA Chief Executive Kevin Arnold. The company says more such deals will be announced in the coming months.

Arnold gave few details: The deal with MySpace is short- to medium-term. IODA’s artists will get a cut of revenue generated from the ads that are shown as part of an embedded player when video or music is played, he said, and they will have an opportunity to get a cut from ads that appear on their MySpace Music page.They will not get an equity stake in MySpace Music.

MySpace Music ‘came to understand what’s most important to us,’ he said.

MySpace’s deal with IODA comes as ...

... the other giant in social networking, Facebook, is reportedly in discussions with digital music services to make a big push into music, as discussed by VentureBeat, following a story in the New York Post from last week.

The dust-up with independent artists and labels marred the September launch of MySpace Music. The service offers free music streaming, supported by ads, as well as a store to buy music and ring tones. A joint venture between News Corp.’s MySpace and the major labels, it was born out of legal wranglings over alleged copyright infringement of music on the giant social network.

The partners all have an equity stake in the new service. But the independent labels don’t.

At the time of its launch, MySpace Music had secured a deal with indie distributor The Orchard. But other independent labels complained that MySpace had jilted them by not offering ownership or attractive deals, even though indie artists helped grow the social site when it was mostly a do-it-yourself promotional tool.

For the independent labels, there was also concern that the advertising revenue model is uncertain. It was important to IODA that there be some guarantee that streams will have fair pricing, Arnold said. Under the terms of their partnership with MySpace, IODA artists will be paid each time their songs are listened to. ‘Most of our clients are primarily focused on making money,’ Arnold said.

Since the launch, MySpace Music has received mixed reviews, including criticism for a crowded interface, an imprecise search tool, an incomplete selection of tracks for purchase and a playlist function that isn’t as streamlined as those on rival music sites.

MySpace Music Executive Director Frank Hajdu noted that the site and the indie deals are works in progress. ‘We’re humble in the sense that this is an iterative process,’ he said. ‘We’re working out kinks every day.’

MySpace is also still figuring out how many songs have been streamed, after announcing a billion streams within the site’s first several days (which, some speculated, could have been because most of the 100-million-plus MySpace profiles automatically stream music whenever they’re opened).

For those indie artists still waiting for their labels to strike a deal, Hajdu said that the site’s promotional tools — advertising through MyAds, placement on MySpace Music’s homepage, the profiles themselves — are still useful.

‘You don’t need a deal to have a promotional agreement with us,’ he said. ‘Our editorial staff works somewhat independently.’

The site currently divides artists into categories — major label, indie, and unsigned — when users search for, say, ‘Top Artists.’ Hajdu said MySpace planned to expand such features to spotlight more indie and unsigned artists.

The promotional value for indie labels meant that even without revenue-sharing deals, taking down profiles and content wasn’t really an option. As folk musician Matt Nathanson, represented by IODA label Vanguard Records and a MySpace user since 2004, said, ‘I never would have taken it down. I never even thought about it. It’s an essential cog in this wheel.’

But he maintains his profiles on other sites such as Facebook and iMeem.

‘It’s like being a member of the debate club and the chess club,’ he said. ‘You meet different people.’

Analysts are watching MySpace Music closely as the best hope to make the digital music business a success as an alternative to Apple Inc.‘s iTunes store. It has a big audience and relationships with advertisers.

‘It’s MySpace’s game to screw up,’ said David Card, an analyst with Forrester Research.

-- Swati Pandey and Michelle Quinn

Screen shot of MySpace Music