The NY Post reported today that MySpace is close to completing a deal with Sony BMG and Warner Music Group to launch a digital-music joint venture. According to the story, the service is expected to launch later this year but additional details are not available at this time. (they all declined to comment).
Sources close to the deal have stated that 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. The new MySpace Music is expected to be a mix of pay-per-download and ad-supported video and audio. Users could expect to buy digital downloads in the MP3 format, access ad-supported streaming video, and buy ringtones.
Collectively, the record companies are expected to hold less than a 50 percent stake in the MySpace venture. Just how large a piece each label gets in MySpace Music will be determined by market share, sources said.
However, one little obstacle needs to be taken care of first - Universal is currently suing MySpace for copyright infringement associated with its viral video offering. Looks like they will need to settle that conflict before a deal can be struck for the MySpace Music joint venture.
[via NY Post]
