Labels eye online social networks as retailers

By Antony Bruno

DENVER (Billboard) - Record labels big and small are working toward the goal of turning every social network profile, blog and fan site into a digital music storefront.

Their ultimate objective is an environment where music fans could stream their favorite music from their personal Web pages and post a "buy" button next to each track. If every site's visitor could, with the click of a button, place that same buy button on his or her own site as well, every fan could become a point of purchase and a channel for promotion.

By sidling up to the social networking scene, labels hope to goose a digital download market that is not yet making up for falling CD sales. But despite their popularity, it's hard to say whether social networks can translate their promotional prowess into sales.

At first blush, it seems like a slam-dunk. Social networks are enormously popular, with MySpace counting 70 million active monthly users alone. Adding to their sheer size is their ability to instantly connect like-minded users based on interests, location or real-life associations. These "friends" can virally pass along content quickly and easily by simply sharing a small bit of computer code -- called a widget -- between individual profiles.

For instance, artists on MySpace often allow fans to post a stream of their latest single to their individual profiles. More than 9 million fans have posted Fall Out Boy's "A Little Less 'Sixteen Candles,' a Little More 'Touch Me'" to their respective sites.

VIRTUAL VENDING MACHINES

Leading the charge is Snocap. The company's MyStore service enables artists to sell tracks from their MySpace pages, and the new Spread the Word feature allows fans to copy the store to their own blog sites, Web pages and virtually any other Internet presence. CEO Rusty Rueff compares it to a distribution network of vending machines.

The system has been adopted by major labels Warner Music Group (WMG) and EMI Music, enabling their acts to sell music directly from their Web sites and MySpace pages, and for fans to do the same.