MySpace Music Portal to launch iTunes competitor

While The New York Post was incorrect in its prediction that MySpace's iTunes competitor was to launch last week, today Reuter's reported that discussions of a joint venture between MySpace and three major music companies hot and heavy.

Reuter's reports that Sony BMG, Warner, and Universal have signed into the joint venture that is to launch within the next five days and is structured to be a mix of digital downloads and revenue sharing on advertising.

Attracting more than 15 million unique monthly visitors (as reported by comScore), MySpace's biggest strength could arguably be its music section and artists pages. Currently, MySpace's music portal only focuses on new music promotion and tour date information and captures some revenue by linking visitors to iTunes to purchase music.

This new joint venture seeks to directly compete with iTunes and seeks to tie together all forms of making money from digital music by allowing users to buy digital downloads in MP3 format, buy related products such as ringtones and videos, and see and hear ad-supported streaming video.

What is most interesting about this joint venture is its business model:
"… 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."

Sources: Mashable, Reuters, New York Post