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Posted by Mark Mulligan on December 10, 2009
As the dust settles on Apple’s acquisition of Lala and MySpace’s acquisition of imeem and iLike it is clear that 2009 is shaping up as the year that the social music marketplace consolidated. The trend was started back in 2007 when CBS snapped up Last.FM for $280 million (though you could make an argument that News Corp inadvertently kicked things off with its $580 million purchase of MySpace in 2005).
So the fact that there is a lot of money pouring into social music shows us this is a prosperous segment right? Wrong. Last.FM’s purchase price contrasts sharply with the reported $1 million that MySpace paid for imeem. imeem was no small fry (it has approximately 30 million users in the
All of which might make it appear strange that Apple and MySpace would want to invest in this space. They are doing so because of two key reasons:
It is to be hoped that Apple and MySpace ‘don’t do a CBS’ and shackle the innovative momentum of their acquisitions (Last.FM currently has the dubious honour of programming HD2 radio in US). It is also to be hoped that record labels recognize the importance of leveling the playing field for smaller players, else they’ll skew the market towards large corporations which history shows lack the disruptive innovate force of success hungry start ups. This all matters to the music fans themselves, because less innovation and competition ultimately means poorer choice.