MySpace has been a catalyst for a number of breakout bands since the social networking site’s launch, allowing bands to stream a limited amount of their music and connect with fans. But now MySpace has entered the fray as a music store with the expanded relaunch of MySpace Music. It’s a big idea that has many in the industry optimistic about bringing income streams into social networking on a large scale. “This is about advertising, sponsorship and all sorts of ways to draw upon other potential income streams,” says RCA Music Group general manager Tom Corson. “We’re hopeful. We’re just trying to stay in the game.” But not everybody is convinced. Click below for more on MySpace Music, including the early snafus and how bands are responding to the new service.

• MySpace Music Challenges iTunes

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Sony BMG is no more, as Sony has finally reacquired the 50% share of the company owned by Bertelsmann. Sony had sought the buy out since July, when the company posted a first quarter loss. Sony now has complete ownership of its music division and has rebranded itself Sony Music Entertainment Incorporated (SMEI). Sony reportedly spent $600 million on the buy back. (more…)

A ruling by the Copyright Royalty Board tomorrow could spell trouble for Apple’s iTunes. The National Music Publisher’s Association has asked for a 66 percent increase on the royalty rate paid out on the sales of digital music — from nine cents per track to 15 cents. In a statement submitted to the board last year, Apple warned that they may shutter digital-music service iTunes if the request was approved. Apple already pays 70 cents of each song purchase to the record companies, who aren’t willing to pay for the increase themselves. Since they would essentially be operating the service at a loss, Apple would rather shut the store down than raise their prices beyond 99 cents per track. (more…)

People who bought music from the Wal-Mart digital music store prior to February 2008 will soon be unable to access their music, thanks to the company’s dismantling of its out-of-use DRM technology. “If you have purchased protected WMA music files from our site prior to Feb 2008, we strongly recommend that you back up your songs by burning them to a recordable audio CD. By backing up your songs, you will be able to access them from any personal computer,” the company said in a statement. “This change does not impact songs or albums purchased after Feb 2008, as those are DRM-free.” This makes sense to us and the majority of digital music-buying population, as DRM is bad and Wal-Mart is doing away with it, but tell that to anybody who invested in Wal-Mart’s vast download store. (more…)

MySpace Music finally launched late last night after coming to terms with EMI. With all four major labels on board, MySpace unveiled their refurbished music pages, complete with new music players that allow artists to upload their entire discography (instead of the six song maximum) and allow fans to purchase music through a deal with the Amazon MP3 store. The whole venture is powered by ad revenues, with all labels and artists getting a share of the ad money based on the number of times their music is played. On the interface side, other new features include the fans’ ability to post 10 songs on their personal sites and create a playlist of up to 100 tracks. Plus, with the new pop-up music player, fans can listen to music even after navigating from the artist’s page. There are issues, however. (more…)

iTunes and the iPhone are about to have some competition on the mobile music sale market, as the upcoming T-Mobile G1 (powered by Google’s new Android mobile operating system) has linked up with the Amazon MP3 store. Whereas the iPhone requires Wi-Fi to browse, sample and purchase music from iTunes, the G1 will allow users to rummage the Amazon store through the phone’s cellular connection. Wi-Fi will be needed to download songs, however. The phone is expected to hit stores next month. Google and T-Mobile are also working with third-party developers that will allow users to get more out of their MP3s through additional applications.

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The slow segue from CD to MP3 took a giant step forward today when it was announced that SanDisk had reached a deal with all four major labels to begin selling memory card albums of both new acts and classic artists. The one-gig Micro SD cards will make their first appearance in Best Buys and Wal-Marts in time for the holiday season. Each memory card will contain the album in all its 320kbps and DRM-free glory. The music industry, trying to fight off rapidly decreasing annual CD sales, hopes the memory card’s immediate accessibility with cell phones, computers and MP3 players will result in a revenue renaissance. The initial batch of micro carded albums will feature 29 artists, including Weezer, Rihanna, Chris Brown, Ne-Yo and Elvis Presley. (more…)

Before the service has even launched, MySpace Music is already facing possible legal woes, as anti-trust allegations have emerged. MySpace Music, a music retailer that hopes to become “the internet’s MTV,” will boast both the backing of its parent company News Corp and three of the four major music labels, thus encompassing about 70% of the recorded music industry. This has independent labels crying foul after being frozen out of the new site. It wouldn’t be the first time the indies impeded on potential blockbuster mergers: Both Sony/BMG and Warner/EMI mergers were interfered by those menacing indies. MySpace Music does offer a service where indie labels could upload their music, but thus far labels have found themselves either unable or blocked from uploading their catalogues. (more…)

The next great hope for the music business is about to come out of the gate. Though they still don’t have a firm release date, the MySpace store has moved forward with their first big promotional push, debuting massive billboards in New York’s Time Square that feature the Jonas Brothers and Lil Wayne and play up the service’s myriad options.

The store will allow fans to stream millions of songs for free in an ad-supported framework, and sell digital downloads with help from the Amazon MP3 store. “The idea behind it was to sort of create the ultimate music experience,” says Chris DeWolfe, the site’s co-founder. “You’ll be able to see the top songs your friends are listening to. Eventually you’ll be able to buy tickets and merchandise and ringtones.”

The new service is a partnership between top labels Universal, Sony BMG and Warner, and the smallest major label, EMI, is reportedly in discussions to join soon. But MySpace officials have yet to hire a chief executive officer for the service and won’t give specifics about prices, what the website will look like or even when it will launch. Some in the music business wonder if a music store based on free, ad-supported streaming can make money to justify the partnership. (more…)

Electronics retail giant Best Buy announced plans to purchase Napster for $121 million. Not much besides ownership will change over at Napster, as the company’s current administration have worked out a deal ensuring the company’s 140 employees will remain on board in their Los Angeles headquarters. As part of the deal, Best Buy will acquire Napster’s 700,000 subscribers, its customer service and mobile capabilities. Of the $121 million, $67 million will go toward short-term investments. Best Buy offered double the company’s Friday stock price, which was $2.65 a share. (more…)

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SongVest, a Wisconsin-based company, has figured out a new way to make money off old songs: Auctioning a portion of the rights of tracks by Aerosmith, Ringo Starr, Ozzy Osbourne, Carrie Underwood and others to fans of the music. In addition to claiming ownership, the winner will also collect royalties from the track, which SongVest will handle for you. The fall ‘08 auction features former hit songs like All-4-One’s “I Swear” and the Monkees‘ theme song, as well as Aerosmith’s “Gotta Love It” and Carrie Underwood’s “I Ain’t in Checotah Anymore.” SongVest’s first auction went down last year, with buyers spending $25,000 for a 25% interest in two songs by Christian metalheads Stryper. (more…)

Social-networking giant MySpace will open its long-promised music store later this month, allowing fans to download and stream millions of songs — including new music and back catalog — from three of the four major labels. In an attempt to differentiate themselves from the two leading digital-music retailers — Apple’s iTunes and Amazon’s MP3 Store — MySpace Music will let fans share music through their pages and build communal playlists, as well as purchase merchandise and tickets. “It’s not the same kind of listening you do with iTunes,” says the site’s co-founder Tom Anderson. (more…)

New digital music site Popcuts has adopted an interesting, stock market-like method to lure people toward its service. When you buy an artist’s song for 99 cents, you’re immediately invested in that track. If the song continues to sell to other users, you’re awarded money to your account. The earlier you purchased the song, the higher percentage you get to the buyers who bought it after you. In the long run, Popcuts hopes you can turn that money earned into actual cash, but as the site is still in its infancy, it can only offer credit towards future song purchases. “We thought that by providing this extra incentive to buy a song legally, namely, owning a stake in that song, would make it more attractive to buy,” said co-founder Hannes Hesse of his Berkley, California-based site. Popcuts takes in a 10-20 percent cut of each purchase, then leaves it to the artist to decide their own percentage. (more…)

While Muxtape is temporarily shut down, sidelined with RIAA problems similar to that of Pandora, attorneys familiar with the territory say the make-your-own mixtape site may be on solid legal ground with a potential case against the RIAA. According to Fred Von Lohmann, Electronic Frontier Foundation’s senior intellectual property attorney, the site is protected under the Digital Millennium Copyright Act of 1998, which provides for a so-called “safe harbor” for hosting material on behalf users, and the same defense used by user content sites like YouTube.

“I think they have a strong legal defense,” Von Lohmann told RollingStone.com. “The problem is if they might not have that money to go to court and take on the RIAA.” Von Lohmann said legal fees could cost around $2-3 million, an investment the Websites would likely rather spend on tech engineers.

An RIAA spokesman said it has made attempts to resolve the issue with Muxtape. (more…)

Having completed his role as producer of Metallica’s Death Magnetic, music svengali Rick Rubin is reportedly on the verge of joining the board of social networking/music blogging site MOG. The music site has already accrued two million users since its July 2006 launch, and the addition of Rubin in whatever capacity Rubin will serve would only assist in giving MOG some cred amongst music lovers. MOG has already raised $6 million in funds, including contributions from Sony and Universal Music, and are planning on revamping their site to be both ad-supported and easier-to-use. Rubin is already employed by Columbia Records to find up-and-coming unsigned artists, but his job there doesn’t preclude him from joining an internet venture. Despite being a “music network,” MOG doesn’t actually play that much music (kind of like MTV), instead giving music fans a forum to discuss and read about their favorite artists, albums and songs.

[Photo: Kelly A. Swift/Retna]