Report: Two record labels ready to sign on for new MySpace Music

myspace musicThere used to be a time when you could only download legal digital music from the iTunes Store and a handful of little-known indie sites. Now there seems to be legal downloading on every street corner, with the record labels cutting deals with everybody except iTunes.

The latest deal to gain legitimate steam is one between MySpace and two of the top four record labels, Sony BMG and Warner. According to a report today in the News Corp.-owned New York Post — coincidentally the owner of MySpace — the social networking site is close to signing deals with Sony and Warner as it puts together MySpace Music. The venture may be announced as early as this week, the Post notes.

“Everybody’s operating with a sense of urgency to try to close it out,” an “industry insider” told the Post.

The new MySpace Music is expected to be a mix of pay-per-download and ad-supported streaming audio and video. As the Post notes, no money is expected to change hands as the labels are “trading content rights in exchange for minority equity stakes in MySpace Music and the chance to participate in the advertising revenues that News Corp. hopes to generate from the service.”

myspace exclusivesWhich could be considerable as MySpace attracts more than 15 million unique monthly visitors to its existing music portal, which already features new music promotion and tour date information over commerce. MySpace also has millions of individual artist pages.

Two other social networks, iMeem and, already offer ad-supported streaming, allowing people to listen to songs on their computers. According to the Post, what makes MySpace Music different is that “users could expect to buy digital downloads in the MP3 format”, although no technical details were given.

MySpace Music is reminiscent of Hulu, the online video joint venture between News Corp.’s Fox Network and NBC. Hulu suffers from missing content, something MySpace Music may also face if it gets off the ground. The No. 1 record label, Universal Music Group, and No. 4 EMI are not on board but are said to be in the early negotiation process.

Sony BMG is the No. 2 label, Warner No. 3.

In order for MySpace Music to really work and be an alternative to iTunes or AmazonMP3, Universal and EMI will have to play along. As Silicon Alley Insider notes, Universal is still suing MySpace over copyright violations.

With sales continuing to tank (last100 digital music year in review), the record labels are looking for ways to maximize available revenue opportunities, so signing a deal with MySpace to form MySpace Music seems only natural as the battle for alternatives to iTunes continues.

last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

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