Eight months ago, Myspace was languishing in NewsCorp’s neglect. The social network was haemorrhaging users as Facebook and Twitter gobbled up market share. From 73.6 million active Myspacers in October 2008, the site’s audience was down to less than 30 million. Even Rupert Murdoch had to admit: ‘We screwed up in every way possible’.
NewsCorp offloaded the site last year for $35m (that had to hurt: they spent $580 on the thing back in 2005). The new owner is Specific Media – a heretofore unassuming digital media firm owned by brothers Tim, Chris and Russell Vanderhook, based in Irvine California. But here’s a nice little nugget. Their key investor, the man who bankrolled the acquisition, was none other than Justin Timberlake. Perhaps his role playing Sean Parker in The Social Network gave him a taste for tech…
Myspace’s transformation following the sale is quite incredible. The sign-up rate has skyrocketed to 40,000 people a day. Facebook, once the agent of Myspace’s downfall, is now its saviour: the Myspace app lets users post their new music on Zuckerberg’s site, and it's pulling in new users in their thousands. There were 900,000 monthly active users on the app in the four weeks to January 14. As of February 14, that number has shot up to 1.6 million. Twitter too has been instrumental in Myspace’s renaissance: you can now sync your posts between all the big networks to draw in followers from every platform.
But Myspace isn’t trying to claw users back from the other players in social. It has given up trying to compete for a share of useless chatter and photo sharing. Its beat is now music, pure and simple, and people talking about music. It’s targeted, it’s a niche where it has form and, most importantly, it’s working a treat. As Chris Vanderhook, Myspace’s COO, says: ‘Consumers are getting excited about Myspace again – a testament to a great music product.’ As of this month, Myspace has a music catalogue of more than 42 million songs – that thrashes Spotify's US library of around 15 million.
If Myspace’s growth continues apace, it will mean all kinds of trouble for all the companies trying to make a living in the music space. Everyone from Spotify to iTunes to Pandora in the States could take a direct hit. But there is one company, funnily enough, that stands to gain from Myspace’s recovery. NewsCorp. That’s right, the Murdoch clan were smart enough to take a small stake in Specific Media as part of the sale. He may have screwed up Myspace, but Rupert Murdoch could still have the last laugh.