MYSPACE MUSIC VENTURE ON FAST TRACK?

According to a report in the N.Y. Post which, like MySpace, is owned by Rupert Murdoch’s News Corp., the social networking giant is nearing deals with Sony BMG and Warner Music Group.

The agreements could be signed as soon as this week, with the service expected to launch later this year.

Unlike most music licensing agreements, no money is expected to change hands in advances. Instead, the labels are trading content rights in exchange for minority equity stakes in MySpace Music and the chance to participate in advertising revenues generated from the service.

MySpace attracts more than 15 million unique monthly visitors to its existing music portal, which specializes in promotion and tour date information, but so far, no commerce.

In addition, the site includes more than 5 million individual artist pages attracting Web traffic not counted as part of its total music traffic as tracked by comScore.

The new MySpace Music is expected to be a mix of pay-per-download MP3s, ad-supported video and ringtones.

Jamba, a mobile entertainment service News Corp. owns jointly with VeriSign, is expected to play a role in the site’s cellphone commerce strategy.

Record companies are looking to MySpace Music as an alternative to Apple's iTunes store, now the second-largest music retailer in the U.S. behind Wal-Mart, with 4 billion songs sold since its April 2003 launch.

The record companies are expected to hold less than a 50% stake in the MySpace venture, determined by individual marketshare.

Universal Music Group is currently suing MySpace for copyright infringement for its video offerings, which must be settled before a deal can be struck on this latest initiative. EMI is also reportedly negotiating with the company, but isn’t as far along as either SBMG or WMG in reaching an agreement.