Saturday, April 5, 2008

MySpace introduces music distribution

MySpace, the world's largest social networking website has formed an online music venture with three major recording companies in a challenge to Apple's dominant iTunes Music Store.

Universal Music Group, Sony BMG Music Entertainment and Warner Music Group have minority stakes in the new MySpace Music venture.

Under the agreement, MySpace Music will offer free music and video streaming supported by advertising, paid for MP3 downloads, ringtones for mobile phones, concert ticket sales and merchandise.

MySpace will integrate its 5 million music artist profile pages with a range of new commercial services.

"This gives a great new lease of life for the download market," said Thomas Hesse, Sony BMG president of global digital business, in an interview with Reuters.

Sony BMG is jointly owned by Sony Corp and German media group Bertelsmann AG.

He said MySpace Music could eventually offer a "premium subscription" service, but gave no details and said it was up to MySpace to make that decision.

Forrester Research analyst James McQuivey said MySpace Music was the right step for music companies, but noted, "Apple will not be affected for the first few years because Apple's iTunes store lives on the strength of Apple's devices."

He added, "One implication of this is that Apple may decide to improve its store experience, but I don't honestly see it trying to compete as a social network."

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