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MySpace Mulling Digital Music Service

News Corp.-owned social networking site MySpace is reportedly in talks with major record labels to launch a digital music service that would offer both premium MP3 downloads as well as free streaming content. According to The Wall Street Journal, the tentatively-named MySpace Music would be structured as a joint venture between MySpace and its content provider partners, with the possibility of outside investors lending financial assistance.

MySpace has been a popular music hub for years, prompting established acts and unknown bands alike to create profile pages that often let visitors stream a few songs. Bands on MySpace also can sell downloads of original music directly through their profile pages. The company may be looking for ways to maintain its lead on rival social network Facebook, which has been gaining in popularity.

So far, MySpace has approached Universal Music Group, Warner Music Group, EMI Group and Sony BMG Music; proposals are still in the discussion stage, but MySpace is weighing a premium platform featuring downloads compatible with virtually portable device, including Apple's iPod, as well as ad-supported streaming content. A music merchandise service is also under consideration, as is a paid subscription service optimized for certain portable devices. MySpace declined comment.

The new proposal isn't fully fleshed out, but people familiar with the plan said it is likely to include both free, streaming music and paid MP3 downloads, which can be played on virtually any portable device, including Apple Inc.'s popular iPod.

The streaming service would be supported by revenue from advertising sales, which would be split with the labels, these people said. MySpace executives have also discussed the possibility of selling merchandise like T-shirts through the service, and of running a paid subscription service that would let users play rented music on some specially configured portable devices, though probably not on iPods, these people said. [FierceMobileContent/Wall Street Journal]

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