Last Fall, apparently, Rupert Murdoch "scoffed" at British turn-around financier Guy Hands for buying EMI in a $6.4 billion deal. According to the New York Times:
Mr. Hands, the private equity financier who had made a fortune sprucing up pubs in England and gas stations on the German autobahn, told the gathering that Rupert Murdoch had privately scoffed at his acquisition of EMI by saying, “MySpace is going to be the future of music, not record labels.”
And, yet, right alongside the piece about EMI, the Times ran a piece ominously entitled "MySpace might have friends but it wants ad money." Of course, it does. MySpace is a business not a social utility. Its purpose is to enrich Murdoch's New Corp. But this isn't happening. As the Times reveals, MySpace is making a paltry $6 in advertising revenue per user and the company missed its $1 billion revenue target for the fiscal year that is about to close at the end of the month. MySpace's prodigious eyeballs, then, are not translating into prodigious dollars. Surprise surprise. We are back in late 1999. Back to being on the brink of the meltdown of the Web 2.0 economy -- an economy which isn't really viable because the majority of large brand owners will not invest serious dollars in unmediated user-generated content.
So I wonder if Murdoch still believes that it's MySpace, rather than the record labels, that represents the future of music. The truth is that instead of MySpace or the labels, the future lies in the live music economy, with next generation promotion companies like Clear Channel spin-off LiveNation. And the big news last week was the Rolling Stones' rumored defection from EMI to the illustrious LiveNation stable where they join Madonna, U2 and Jay-Z.
Scoff, scoff. Like Guy Hands, uncle Rupert got it wrong. My advice to him is to stick to predicting the future of things he knows about -- like cable television and newspapers. The economic future of music is the past. It's the live act.