MySpace Music might pay off

myspaceWhile online music business missteps and failures litter the information super highway, MySpace has a good chance to hit paydirt with a new music business model that pleases music fans, artists, record labels and News Corp. bosses.

MySpace Music launched September 25th to mostly enthusiastic press and extremely hopeful music industry execs. Four major labels including Sony BMG, Universal Music Group, Warner Music Group, and EMI are on board. The new site incorporates streaming music and a download store. Streaming music is free to users, supported with advertising brokered by MySpace. One-click music purchases will be fulfilled by Amazon’s MP3 download store. Advertising partners include Toyota, hosting a year-long download giveaway called “Toyota Tuesday’s,” McDonald’s brand-wrapping music players with other elements sponsored by State Farm and Sony Pictures.

MySpace Music will also hawk tickets, ringtones and artist merchandise. While some music business execs estimate an ad-supported online music service could dwarf the $30 billion global recorded music industry, Apple and iTunes ecommerce engine has been the unchallenged leader in the online music distribution. With MySpace Music, the record labels collectively have a 40% ownership stake in the busines. They have also made favorable terms with MySpace for the streaming music service, and will share in the ad revenue. MySpace Music plusses up the track-by-track transaction model by creating an always-on revenue stream for artists and labels through the ad supported streaming, artists pages and peripheral sale items.

From a social music strategy perspective, users and labels are waiting to see Facebook’s response to MySpace Music. Facebook appears to be placing their bet with the popular iLike application that has 25 million registered users. In a counter-programming move, Facebook is promoting the iLike release of Thievery Corporation’s new album to their user base, similar to REM’s preview of Accelerate that was limited to iLike users. The sneak peek preview was set to launch on the same Thursday that MySpace Music debuted.

In other social music related news Best Buy just offered to pick up Napster for a cool $121 million and Zune enabled WiFi discovery and purchase of songs heard over its radio.