"In many ways, it is an unprecedented foray into music on the Web," said one person familiar with the deal. "Now, you have music discovery happening in some places, and music consumption happening somewhere else, and the non-recording aspects of music, such as ticket purchases and merchandising, happening even elsewhere. MySpace Music is going to aggregate all those disparate activities."
MySpace Music would combine free and paid services. Music streams and music videos would be free to users, but carry advertising. Downloads, ring tones and ring-back tones would be sold.
One obstacle to the deal has been a 2006 copyright lawsuit filed by Universal Music against MySpace, which it described as a "vast virtual warehouse" of pirated works from some of the company's best-known artists, including Mariah Carey, Diana Krall and U2. A Universal Music spokesman declined to comment on the status of the suit.
The music industry has struggled with plummeting CD sales and revenue lost from illegal downloading of music online.
Sales of digital music at online stores such as iTunes have not offset the industry's loss in revenue.
The MySpace Music service presents a potential new source of revenue. Some music executives hope it might also challenge Apple, which some of them complain is inflexible and too powerful.
"It's unlocking the value of music in the online space," said a music industry source, who spoke on condition of anonymity.
"It's that community atmosphere, that community that you're tapping into and monetizing. It's sort of the new MTV."
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dawn.chmielewski@latimes.com
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michelle.quinn@latimes.com
