MySpace and Project Playlist: 20M Users Up in Smoke?

Over the weekend, MySpace blocked Project Playlist (now Playlist.com) widgets from appearing on its site.  When Techcrunch asked about the block, MySpace's statement was as follows:

MySpace has received notices of infringement about Project Playlist at different times from several of the major music companies currently suing Project Playlist. Per our policy of taking very seriously the requests of rights holders to block access to third party sites that are believed to be infringing, we have evaluated the requests of the major music companies and determined that it is in our best interest not to allow Project Playlist widgets on MySpace, and effective immediately, we will no longer be allowing these widgets within the MySpace platform. Any third party widgets (including any music widgets) are welcome on MySpace so long as they do not include infringing content—we encourage our users to utilize the many legitimate applications found on MySpace and across the Web.

So how big of a hit is this for Project Playlist?

It's unclear, but my best best guess is that it's a massive hit.  On November 21, Playlist founder reported 40M registered users.

A "site:myspace.com playlist.com" query on Google yields more than 8.5M results.  And because MySpace offers private, uncrawlable photos, 8.5M is only the tip of the iceberg.

While I haven't found any statistics about what percentage of MySpace profiles are private, I know it's not insignificant from my company's experience with our MySpace application.  A conservative estimate of 1/3 MySpace profiles as private yields another estimated 4.25M Project Playlist widgets if you assume that their widgets appear at the same rate on private profiles as public ones.

Using this back of the envelope analysis, that's a total of nearly 13M users affected by the MySpace block.  And given that Google crawl numbers are typically understated, and that ProjectPlaylist burst onto the scene largely due to its traction on MySpace, I suspect the real hit might be closer to half.

13M to 20M users of your service zapped from one day to the next.

The last time I saw a public beatdown of a widget provider by MySpace, it was Photobucket that took the hit - and the beatdown seemed to be an attempt by MySpace to negotiate a better price.

This one feels different - given the recent news of the RIAA deciding not to go after end users, and Mixwit's abrupt shutdown, it appears to me that the record labels have shifted legal resources from harassing end users to harassing the companies that enable listening to copyrighted music for free.

If you are in the online music business, these are scary times.  The record labels seem determined not to fade quietly into irrelevance.