Can MySpace compete with iTunes?

According to breaking news posts at Mashable and PaidContent, MySpace plans to start selling songs from the more than 3 million (3 million!) bands who use the social networking site. The site — now owned by giant media and entertainment conglomerate News Corp. — will be working with Snocap (started by Napster founder Shawn Fanning) and will offer songs in MP3 format, reportedly without digital rights management or DRM controls. MySpace competitor Bebo has already launched something similar.

Although the company is (naturally) pitching this as a competitor to iTunes, I’m not sure how much of a competitor it will be (Liz Gannes at Gigaom says it won’t compete directly because the major labels won’t want to give up their DRM). Out of those 3 million bands, how many of them are people likely to want to buy songs from? I think iTunes mostly appeals to people who want the latest hot single or a long-lost song from their youth, whereas the bands on MySpace are largely unknowns. That’s not to say the effort won’t help up-and-coming bands, as it has Fallout Boy or the Arctic Monkeys, but I don’t see that as necessarily competing with iTunes.

The ones who should really be scared of such an effort (if it succeeds) are the traditional record companies. As music-market middlemen, they are ripe for disruption. Mark Evans and Rob Hyndman have some thoughts worth reading as well.

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