The Fate Of Muxtape and Other Music Sites

There are a lot fo music sites right now from the tiny (mystrands, soundpedia) to the huge (imeem and last.fm) and from the old (napster, rhapsody) to the new (muxtape, mixwit). The proliferation of sites is similar to that seen during the first dotcom boom, and I can see that the next year is going to be make or break for most of them.

The established players, napster, rhapsody and last.fm probably aren't going anywhere, they've got solid backing and enough users and brand awareness. imeem is the biggest fish and it's backed by sequoia, but it could well find itself in second place if myspace gets its act together.

Many of the smaller sites are going to get folded into larger sites, but they're increasingly going to find it hard to compete with the massive, freely acessible, legal catalogs of imeem, last.fm and myspace. The dynamic will become increasingly content centric and sites without content aren't going to be able to hold much of an audience, except perhaps amongst users who hate flash widgets and advertising.

Those sites with content will either need paid subscribers or a ton of advertising.

This puts muxtape in an interesting position, right now it's the star of the blogosphere, but soon it will have a horrible disfiguring disease that will slowly change it and make it less attractive. The record labels will demand to get paid which means one or more of these things
1) Tons of advertising all over the site. This will piss off those design fixated bloggers who have been justifying its superiority over other sites by its minimalism.
2) Users will have to pay a subscription to post or to listen, this will piss off casual users.
3) Restrictions on what can be posted - no more Beatles for sure, and if the site wants to be cheap it might skip anything from major labels which will probably mean fewer ads or cheaper subscriptions. This will piss off everyone every time they try to add a track and find that it's not covered by the record deals.

Regardless of how fast muxtape goes I don't see it having a chance of getting major label content. They all want big advances - spiralfrog paid 3 million dollars for Universal, some sources suggest imeem's advance payments were more like 20million. So Muxtape will need this amount of cash on hand to negotiate, and I don't see any investor riding in to help it, by the time this is a possibility myspace music will be launched and both last.fm and imeem will be properly established. No investor is going to want to get into a market that crowded, especially when the primary appeal of the site is confined to

1. Users who haven't heard of imeem.com
2. Users who've heard of imeem but prefer the 'less is more' design
3. Users who've heard of imeem and are annoyed that their beatles tracks turn into 30 second previews

So, if muxtape tries to go with the major labels it's going have to lose the advantage that it has with groups 2 & 3 to have a chance of being legal, and then there's no guarantee that it'll be able to do all this on day one, it could take months for them to get on board, during which muxtape with have a partial catalog and 2-3 other competitors with full catalogs.

So, muxtape will go where the bloggers are, and try to get profitable using only indie music, accepting a smaller slice of the pie, while perhaps hoping the music tax becomes a reality and gives them a chance of getting into the major label game without putting itself at a massive disadvantage.

So.... enjoy your muxtape while it lasts, it's not going to get sued out of existence, it's just going to die slowly as it turns into a clone of imeem.com