Sony BMG, WMG Near Deal With MySpace
March 24, 2008 at 5:39 AM (PT)
MYSPACE's plan to launch a digital-music joint venture with the major record companies is picking up steam, as the social networking giant nears deals with SONY BMG and WARNER MUSIC GROUP, multiple sources familiar with the situation told THE NEW YORK POST. The agreements could be signed as soon as this week. The service is expected to launch later this year.
"Everybody's operating with a sense of urgency to try to close it out," said one industry insider close to the talks.
Unlike most music licensing agreements, which require upfront advances, no money is expected to change hands. Instead, 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.
Everybody's operating with a sense of urgency to try to close it out.
The new MYSPACE MUSIC is expected to be a mix of pay-per-download and ad-supported video and audio. "The concept of the joint venture is to bring in all forms of [making money from digital music] and much more tightly integrate them," said one person familiar with the negotiations.
Users could expect to buy digital downloads in the mp3 format, see and hear ad-supported streaming video, and buy such products as downloadable videos and ringtones. JAMBA -- a mobile entertainment service that NEWS CORP. owns jointly with VERISIGN -- is expected to play a role in MYSPACE MUSIC's cell phone commerce strategy, a source said.