(UPDATED) Since taking over MySpace from News Corp, Interactive Media (formerly Specific) has pushed traffic back up 36%. But that hasn’t stopped MySpace from bleeding $40 million in 2012, according to pitch materials dated 11/16/2012. To save the ailing company, investors are being asked to pony up $50 million to re-launch MySpace as a direct competitor to Spotify and Pandora.
An investor pitch deck, obtained by Business Insider, shows MySpace will generate revenues of just $15 million in 2012 and is projected to lose another $25 million next year. If investors open their wallets, Interactive says it will use $10 million to market MySpace, $15–$25 million to license music and hold $15 – $25 million for “general working capital.”
Free Music From Unsigned Artists A “Competitive Advantage”
In the same document, Interactive tells potential investors that one of its major competitive advantages over other streaming music services is that it relies heavily on royalty free music – the 27 million songs uploaded to the old MySpace by 5 million mostly unsigned artists. According to MySpace, they account for 50% of the music played there.
So, is MySpace hoping to profit on the backs of these 5 million artists? Apparently they don’t view it that way, claiming in the pitch that another “strength” is an ability to “embrace artists and foster their unique relationships with ther fans”.