Apr 3, 2008, 19:09 GMT
San Francisco - Social networking site MySpace on Thursday announced an online music service with three major record companies in a move seen as a challenge to Apple's iTunes and to the growing strength of MySpace rival Facebook.
MySpace already allows members to listen to free music at their computers with an advertising-supported service. MySpace Music will also feature downloads, concert tickets, merchandise and ringtones.
MySpace Music is a joint venture between the News Corp company and Universal, Warner and Sony BMG which will have a chance to earn money from downloads and from a share in the ad revenue from the MySpace service.
EMI, the fourth major label, is not a part of the deal at this time, but people involved in the negotiations said it would probably join soon, the New York Times reported.
All four of the major labels have been struggling along with the rest of the music industry as illegal internet downloads shrivel music sales which dropped to 11.5 billion dollars in 2006 from a peak of 15 billion dollars in 1999.
The success of Apple's iTunes has not translated into financial gains for music companies which earn only a small cut from every iTunes download.
'Warner Music Group is very pleased to be entering into this groundbreaking joint venture,' said Edgar Bronfman, Jr, Warner Music Group's chairman and chief executive officer.
'This venture may provide a defining blueprint for this next important stage in the evolution of social media, benefiting consumers, artists and music companies alike,' he said.
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