MySpace & The Media Revolution

You know Tom, from MySpace? He's the annoying guy who's automatically your friend when you started your profile. Well, his name is Tom Anderson, and he and his partner Chris DeWolfe are now $580 million richer than you are.

MySpace.com was purchased by Rupert Murdoch's News Corp., a global media monster. News Corp. is MASSIVE, owning $23.8 billion in every media channel there is, from TV, cable stations and movie studios to radio stations, publishing and on-line business.

Viacom, MTV's parent company, had been haggling with MySpace at $50 million before News Corp. offered a whopping $580 million for the site. Google could have paid half that 3 months before, but according to Mr. Murdoch himself, were arrogant and didn't see the site as anything so special they couldn't build themselves.

Media companies traditionally create content to attract viewers, and then advertisers. The special thing about MySpace is that it is run by its users, each page unique to the individual it represents. News Corp has invested $20 million to prevent the technology hiccups that crippled Friendster before it.

News Corp. hopes to use the site as a youth marketing company that gives them the "ability to look inside and understand how hits get created, spot hot niches and identify trends at their beginnings. MySpace grows at 280,000 news users per day. MySpace reaches more kids each day that MTV sees in a week.

This is critical to keeping up with the changing market. All date shows that Internet has signaled the end of the mega-hit. Unlike all other forms of media, which are one-way (viewer reads/watches content with no immediate feedback mechanism), the Internet is peer-to-peer, with "as many senders as receivers...spread out across geography and time."

This means that more of the market will be segmented to meet the specific needs to independent groups, with fewer big hits reaching a mass audience. In 1953, 72% of TV households watched I Love Lucy on Mondays. Today, only 18% watch American Idol. (Of course, AI is probably bigger at 18% than Lucy ever was at 72%.) "It will take decades for our entertainment industries to internalize the lessons of this shift."

But this is the same for all revolutionary media formats. "Before the Industrial Revolution, culture was mostly local, with the distances dividing people giving rise to regional diversity." Railroads, then mass-produced newspapers, radio, and TV changed the world. Suddenly, there entire country knew what was going on. Today, Seattle gets the same news as Miami with London sharing the same Associated Press articles.

This is a powerful change in human culture that we all take for granted. The Internet has continued to facilitate the global village. Is this leading to increased isolation in America? Maybe, but that's another blog. (Shout out to Mom for that article.)

For further reading, see these 2 articles in the July 2006 Wired Magazine: "His Space" & "The Rise and Fall of the Hit." The second article was written by editor-in-chief Chris Anderson, who has an amazing blog and a soon-to-be-released book "The Long Tail" detailing the fall of the mega-hit and the rise of niche marketing.