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News Corp. social networking property MySpace Inc. has partnered with three of the Big Four record labels to create MySpace Music, a joint venture that will sell downloadable music from an enormous catalog of artists. Participating in the joint venture are Universal Music Group, Sony BMG Music Entertainment and Warner Music Group, while EMI Music is notably absent.
MySpace already boasts a roster of 5 million artist profile pages, many of which are not affiliated with major labels and already offer free downloads or streaming songs. The new site will sell song files that do not include digital rights management software, along with ringtones, concert tickets and t-shirts, and will include streaming audio supported by advertising. A mobile component will be designed in partnership with Jamba, another News Corp. property. MySpace Music will compete directly with Apple Inc.'s iTunes store, which is said to have just surpassed Wal-Mart Stores Inc. as the nation's No. 1 music retailer.
In a conference call, MySpace chief executive Chris DeWolfe declined to provide financial details, although the three labels are said to have received minority equity stakes in the new company, along with some measure of revenue sharing.
Peter Kafka at Silicon Alley Insider liveblogged the conference call. In his notes, he suggests that EMI declined participation, although DeWolfe said the company would "like to do business with everyone." EMI has distanced itself from the other majors' digital strategies before, becoming the first to abandon DRM in its dealings with iTunes last April in a move that the other labels eventually followed. EMI earlier this week also hired Google Inc. chief information officer Douglas Merrill to lead its digital music efforts, perhaps signaling a move toward more free music content.
Separately, Kafka notes that Universal has settled its differences with MySpace, resulting in a cash payment rumored to be as large as $100 million, in advance of the new joint venture. - Paul Bonanos
See April 3 press release from MySpace
See Silicon Alley Insider's liveblog of conference call
See April 2 post from ArsTechnica
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The online music market is beginning to get pretty crowded, and MySpace’s new music site will only increase the competitiveness. Apple’s iTunes recently surpassed Wal-Mart as the biggest music retailer in the United States, and there is plenty of other competition in the digital music world. Besides Amazon.com, music portals such as eMusic and SpiralFrog are expanding their reach, hungry for a share of the huge online music market.