MySpace, the nation’s largest online social network, announced Thursday that it is joining with the nation’s top three music labels to create a service offering free music streams and paid downloads for its millions of members.
The joint venture will build upon already strong music-sharing aspects of MySpace to create an online destination where users could not only recommend and discover favorites with one another, but also sample or purchase songs and buy concert tickets and ring tones.
Record companies and social networks have struggled to create a profitable online business model. MySpace executives boasted that the joint venture includes “new monetization and revenue models.”
“We believe the Web is becoming more social, and MySpace Music is a new way of consuming music online,” said Chris DeWolfe, co-founder and chief executive of MySpace.
The music streams will be supported by ads and be rendered to users free. Executives would not reveal the prices for downloads but said they will be “competitive.” The venture’s largest competitor in that regard will be Apple’s iTunes store, the second-largest music seller in the United States after Wal-Mart.
The new MySpace music services will be rolled out over the next three to four months, DeWolfe said in a conference call.
Record companies have struggled in recent years with Internet piracy, and some analysts saw the deal as a major change in the labels’ stance toward the technology — they’re embracing it.
Under a deal Apple arranged with music labels, downloads were digitally protected from some types of copying. In its announcement, MySpace said it will offer the service without such constraints.
The music labels joining the MySpace venture are Universal Music Group, Sony BMG and Warner Music Group. A fourth major label, EMI, did not sign on.
“I think there was an epiphany by the labels here. They’re beginning to think, ‘How can we do more with the Internet?,’ ” said Phil Leigh, senior analyst with Inside Digital Media.