MySpace Music: Not the Only Free-Music Game in Town

The Sept. 24 launch of MySpace Music has made it easier to find and listen to free, major-label music on the Web. But it’s not the only game in town. As online-music aficionados already know, there are several other free sites where you can pretty much do the same thing, including Imeem, Last.fm and SpiralFrog. Among these, Imeem has the largest following and the vastest selection of free, mainstream music — something it has been offering for more than a year.

Here’s how Imeem and MySpace Music stack up against each other. Both have rights to millions of songs from the four major music labels — EMI, Sony BMG, Universal and Warner Music. Both allow users to stream tunes for free on the Web and create playlists that can be shared with friends. MySpace Music has the tidier and more efficient interface, but its playlists cap out at 100 songs (or just 10 tracks, if users post them to their MySpace profile page). Imeem’s playlists, meanwhile, are unlimited in length.

Though both sites have rights to the same music, you won’t necessarily find the same tunes on each. MySpace gets most of its major-label music directly from record companies; Imeem gets those same songs from members who upload tracks from their personal archives. “We’re really crowd-sourcing our music,” says Imeem founder Dalton Caldwell, which is arguably a more democratic way to make the most popular tunes available first. Before songs can be shared on Imeem, the site checks the digital fingerprint of each track to make sure it has the legal right to distribute it. If not, members can only hear a 30-second clip.

Perhaps the most significant difference between the two services is how they let you share music with your friends. MySpace is basically a walled garden. You can share your playlists with other MySpace users — and it’s definitely fun to check out what new songs your friends are grooving to — but you can’t listen to those playlists on other sites. Imeem, on the other hand, lets people export and post their playlists on blogs, Facebook, and even MySpace, using an embeddable widget. That means your friends can listen to your Imeem songs without ever logging onto Imeem (or even knowing that it exists). But MySpace president Chris DeWolfe thinks playlists make more sense as an extension of a person’s profile. It’s the digital equivalent of the music playing on the stereo when you go over to a friend’s house for dinner, he says. “It’s a social environment where you’re listening to music,” he says, adding, “there are very few people who go to websites just to listen to music.”

Indeed, compared to MySpace, which has about 71 million U.S. users (17 million of whom already listen to music regularly on the site), Imeem is relatively unpopulated. It has about six million unique visitors in the U.S. and 17 million worldwide, according to Quantcast. “They have a dedicated but very small constituency,” notes NPD entertainment analyst Russ Krupnick. Part of the problem is Imeem’s jumbled interface, which is so focused on community that it’s not immediately obvious what the site is even about. Part of it is legacy: Imeem, which was co-founded by engineers from the original Napster music service, struggled early on and even got sued in May 2007 by Warner Music, which charged it with copyright infringement. (Imeem started out in late 2006 allowing its users to share music — without seeking legal permission.)

Still, Imeem escaped Napster’s fate and went on to make online music history in December 2007, when it became the first site to stream free music legally from all four major labels. (Indie music abounds on the site as well.)

So, how did Imeem go from being sued by the music industry to partnering with it? Just two months after filing charges, Warner Music dropped its suit against Imeem in exchange for a stake in the company. Wise move. And new ad-revenue sharing deals ensure that whether listeners pay for music or not, the labels still make money.

MySpace’s vast following makes it a likely leader in the on-demand music-streaming market. “This makes MySpace cool again in some ways,” notes Jupiter Research’s David Card, who adds that it may even lure new members to the site. But the free-music model looks like it may end up costing MySpace and other providers more than they had originally bargained: In an agreement announced Sept. 23, the music industry said it planned to adopt a sliding fee scale for free-music-streaming sites; instead of the 9.1 cents per song that is currently paid to songwriters, composers and producers, streaming sites will now owe about 10.5% of their overall profits. For listeners, however, the music will still be 100% free.

(View a gallery of social networking applications here.)