The future of music may very well be free; at least on social networking sites that can sell targeted ads against it. The latest site to get in on the growing trend is Kiwibox, who is announcing a deal this morning with Universal Music Group to stream the record label’s music videos. The news follows the recent launch of MySpace Music and the re-design of Imeem, both of which feature free streaming of full tracks from all four of the major record labels.
As for Kiwibox, the site will launch music videos from Universal before year end, in an aptly named new section called “Kiwibox Music Videos.” The content should be a welcome addition to the site, which currently features a mix of editorially selected and user-generated content in categories like Entertainment, Body & Style, and Fashion. Kiwibox launched a major re-design earlier this year, giving its largely teen userbase Netvibes-like drag and drop functionality for their profiles.
Similar to the other deals in the online music space, Kiwibox’s music endeavor will be ad-supported, with revenue being split between Universal, the artists, the copyright holders, and if there is anything leftover, maybe even the social networking site.
I say that not completely in jest – the financial details of the deal are not being disclosed. But with the rumor being that MySpace Music needs to gross $10 on every 1,000 ad impressions just to break-even, free streaming music could at this point be considered largely a loss leader – something that attracts people to a website but isn’t necessarily profitable.
For mid-tier social networks like Kiwibox, offering free music videos from the likes of Kanye West and Snow Patrol (Universal labelmates) can only help membership – if it’s enough to find a sustainable business model it’s something we’ll see play out over the coming months as more sites move to make deals with the record companies.
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