• Fortune, Monday, September 15, 2008 11:15 AM

Universal Music Group, Sony BMG and Warner Music, which collectively account for 77% of U.S. album sales, are about to make their catalog of music freely playable on MySpace Music. EMI Music Group, the fourth major label, which accounts for 9% of industry sales, is in similar talks. Later this month, MySpace Music will offer free streaming music from these companies supported by advertising.

MySpace users will be able to visit the profile pages of major label artists and click on any songs they want to listen to. They'll also be able to extract songs and put them on their profile pages. "There will be a button that says, FOR THE FULL CATALOG, CLICK HERE," CEO Chris DeWolfe says. "That's what's never been done before." He adds that the new music site encourages exploration (which equal page views) whereas Apple's iTunes is all about getting the songs you want and getting off the site. "This is how people discover music now," says Luke Wood, executive VP of Universal's Interscope Geffen A&M. "It's not happening through people reading Rolling Stone. It's not happening through the radio. It's happening through social networks online."

Not everyone is convinced, however. Over the weekend, TechCrunch reported that MySpace Music was looking to raise capital of $100 million on a valuation of $2 billion. Why does a company backed by News Corp. and the music majors with huge ad deals already locked in need to raise so much money, asks GigaOm's Om Malik? "Perhaps raising money is necessary because there is no hope for this joint venture to turn a profit," he says.

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