MySpace Gives Scale To Free Music Experiment
UMG would have to settle an outstanding lawsuit it has against MySpace before any deal could take shape. UMG sued the News Corp. company for allowing users to post artists' songs and videos on their homepages without gaining the record label's permission to do so.
Should MySpace and the four labels come to an agreement, News Corp. would then join Amazon.com, Wal-Mart and a host of other providers trying to chip away at Apple Inc.'s dominance of the online music market. Unlike Apple's iTunes, a pay-for-download service, MySpace would offer ad-supported streaming music for free. MySpace would then sell ads against the traffic and allow consumers to pay to download songs. Record companies believe this gives consumers a way to discover new music, which they hope will translate into higher sales.