MySpace may have lost the social-networking battle to Facebook a long time ago, but it hasn't given up the fight when it comes to music. Specific Media, which acquired the struggling site from News Corp. in June for $35 million , is betting that MySpace can become a dominant music player once again when it formally relaunches in early 2012.
"No other company has the rights MySpace has," says Tim Vanderhook, who along with brother Chris is co-founder of Specific Media and CEO of MySpace. "Nobody has the relationships we have with the four major labels, the catalog of 25,000 independent artists and 42 million songs. If you take Facebook's music announcements with Rdio, MOG and Spotify and you aggregated all those services up and took their audio catalog, it's not even half of what MySpace has."
Vanderhook calls MySpace Music the site's "hidden treasure," and alludes to plans for a radio product that could compete with Pandora and an on-demand platform that could challenge Spotify. This is just part of the strategy that he and MySpace creative director Justin Timberlake  outlined on Monday evening to kick off Advertising Week in New York. The presentation was followed by the MySpace-sponsored AMP'd! Up Opening Concert, presented by Billboard.com, featuring performances by B.o.B., Natasha Bedingfield and Far East Movement.
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"It used to be that when you think of MySpace, you'd think of the independent, unsigned artists who went and created their image and used it as a marketing platform to promote their music and try to build a fanbase," Vanderhook says. "Overall, MySpace got away from that under News Corp.'s leadership and lost sight of that independent artist, which is something we have a strong hold on. There are still people who go to the site and use it as their main page. News Corp. really stopped servicing them in the way they should have been served."
But reclaiming MySpace's relevance has been a rocky road for Specific Media, which laid off half of the site's 400 employees after its June acquisition and an additional 8% of its own workforce  (about 50 to 60 employees) just last week. The site's U.S. traffic has also been halved in the last eight months, plummeting from 73 million monthly unique visitors in January 2011 to 33.1 million in August 2011, according to ComScore. Specific Media and Timberlake also scuttled plans for a late-summer press conference in favor of the private advertiser reception and Advertising Week concert, troubling signs that MySpace is still far from ready for prime-time.
Vanderhook says MySpace is still undergoing an entirely new redesign and developing new products, though he'd be "really pleased if we could get something out at the end of the year." But once MySpace 3.0 does debut its new look and feel, users old and new will know. "Right now, if you create a great experience, it's still wrapped in a bad product and consumers reject it. We want to get that right and pump out product on a monthly basis from there," he says.
Specific also wants to make streaming music a profit center for MySpace in a way its previous owners never figured out. "Since News Corp. didn't have advertisers to support the streaming, they hid the streaming because they couldn't afford to pay the royalty fee to the labels every time a song was played," Vanderhook says. "What Specific brought to the table is a big digital advertising business, great relationships with marketers that have injected a lot of advertising coming through."
And although Timberlake has been heavily involved in the creative process of MySpace's relaunch, don't look for him to be the official "face" of the company any time soon. "Internally, we don't really look at Justin as a marketing platform," Vanderhook says. "Obviously, he's Justin Timberlake. He's a superstar. He'll probably draw a crowd at a moment's notice. But it's not really about Justin on board to be a marketing platform, it's really to have him as a creator with us to be the next-generation community product. And really his past experiences are invaluable - before he was famous, when he was famous, and all these types of toolsets in his acting career now. The guy has so many experiences he can bring to the table. The guy every single day is emailing ideas. He's very integrated in the development of the product, whether he wants to market it or not that's up to him. We really just want him on the creative side to help him build the experience."