Monday, September 04, 2006

MySpace to tackle iTunes


MySpace will challenge Apple's iTunes in the music download market following a deal with Napster founder Shawn Fanning's technology company.

The social networking website, owned by Rupert Murdoch's News Corporation, has signed a deal with Snocap, which provides back-end services for selling music online.

Details of the deal were not made public, but it is possible that News Corp could end up taking a minority stake in Snocap.

Earlier this year, Nokia acquired digital music download company Loudeye for $60m (£32m) as part of a move into the market.

When the MySpace online store opens later this year, it will allow bands and labels of any size to sell songs.

With more than 100 million registered profiles, and in excess of 60 million active monthly users, MySpace has the critical mass of users to potentially pose a viable alternative to Apple's dominance in the online music download market.

MySpace has already secured an important position in the music world - for independent label bands, unsigned artists and well-known acts alike - as an inexpensive, yet effective, marketing platform.

The website, which generates the majority of its revenue from advertising, sees music sales as an obvious new source of income.

A number of companies have entered, or are about to enter, the legal music download market.

MTV has launched a service in conjunction with Microsoft called Urge, which is not yet available in the UK.

Microsoft also recently announced it was to launch Zune, a competitor to the iPod, as well as a deal with EMI to pre-load music videos on to the device.

Last week, new online outfit SpiralFrog.com signed a deal with Vivendi Universal to give away music downloads by using advertising to generate revenue.

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