MySpace and Record Companies Create Music Site
Writes BRAD STONE and JEFF LEEDS in the New York Times:
In the latest effort by the ailing music industry to bolster its declining prospects, three of the four major music companies have struck a deal with MySpace to start a music Web site.
As part of the deal, MySpace will spin out its popular MySpace Music service as an independent joint venture in partnership with Universal Music, Sony BMG and Warner Music Group. 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 music companies will own minority stakes in the venture and will make their entire music catalogs available.
For the music industry, the deal is partly born of desperation. In the face of widespread, escalating online piracy, music sales dropped to $11.5 billion in 2006 from a peak in 1999 of nearly $15 billion.
