MySpace to Launch Joint Music Venture With Major Labels
MySpace, the popular social networking site, has come up with a creative solution to a lawsuit filed by Universal Music Group. Instead of just settling with Universal, Myspace (owned by News Corp) announced a new joint business venture with three major record labels: Warner, Sony BMG and Universal.
The company will be called Myspace Music and will launch in July or August of this year. It will be owned by News Corp and the three labels, with an initial investment of $120 million distributed among the labels. The new service will include the streaming rights to the entire catalogs of the three labels, as well as a DRM-free online music store. Users will also have access to an improved music player that supports the creation of playlists, in addition to the increased amount of streaming music available for their profiles. The venture will redistribute ad revenues to the labels based on their stake in the company, not based on the number of plays their copyrighted material. The advertisements will initially be display ads, but may move to an audio format embedded in streaming music files at a later date.
All in all, it sounds like good news for MySpace users and bands, with greater availability of music to stream and a proper company to promote the bands on the Myspace Records label. The deal also serves as a reminder that the record companiwa are no longer counting on getting paid directly for the music they hold copyrights to, and points toward an ad-supported future business model. Looks like MySpace will be trying to cram a few more ads into their crowded interface soon, but we don't mind as long as we can listen to whatever music we want for free.
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