MySpace, the 120 million user strong social-networking site is to venture into the online music fray by allowing listeners the ability to listen to music free of charge. Music that the users download to portable devices, however will be subject to a download fee.
No doubt the free unrestricted MySpace listening model plans to generate revenues from posting banner ads and will likely be selling concert tickets, ringtones and other music related merchandise.
MySpace, to get the big labels to play ball, will have to share its ad revenues, but no details as yet on the percentage of revenue split.
MySpace has signed DRM free deals with the big four music publishers,
Sony BMG, EMI, Universal and Warner as well as the independent music
group Orchard. The move is seen as a major challenge to Apple's iTunes, which currently is the dominant player and has the most extensive catalogue of music.
Not everyone, as you can imagine, is enthralled with the deal as News Corps' MySpace seems to have neglected to include most of the other independent labels, which is particularly ironic given these are the labels that put MySpace on the online map in the first place.
The launch of the new MySpace store garnered criticism from Charles Caldas, head of independent rights body Merlin. Mr Caldas said it was "incredibly disappointing" that the service launched without finalizing a deal with the biggest independent labels and artists.
Merlin's members, which includes Koch, Beggars Group and Domino, have a 9 percent share of the US music market — equivalent to EMI's market share.