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Facebook asks labels about music service

Facebook is approaching big record companies about creating a music service on the social networking site, according to several people familiar with the matter.

The approach has come in the past week and was described as “preliminary”. It follows similar moves by MySpace, the leading social network site, which is discussing a MySpace Music joint venture with the four largest record companies – Universal Music, Sony BMG, Warner Music and EMI.

The record companies, all of whom declined to comment, view the recent talks as evidence of the importance of music to social networking sites as they vie for young audiences.

They are hoping that the sites, which have mostly served as promotional platforms for artists, will become sources of revenue at a time when their sales of physical albums are in decline. They are also eager to encourage a counterweight to Apple’s dominant iTunes store.

Facebook, which declined to comment, has been working in recent months to bolster its music offerings.

In November, it introduced a way for bands to create their own home pages similar to those found on MySpace. It also has links to iTunes and offers applications from several internet music companies, including iLike, Last.FM and Pandora.

However, Facebook does not yet have licensing relationships with the big record companies.

While details remain vague, record executives said that they expected a service would offer consumers free streams of music, supported by advertising, as well as the ability to pay for downloads in MP3 format, which can be played on any device.

Those are the rough outlines of the MySpace Music service, which is still being discussed. The News Corp-owned site could also include a subscription service and allow fans to buy merchandise and concert tickets, according to people familiar with the matter. One hurdle to a deal is the fact that Universal, the largest music company, is suing MySpace for alleged copyright violations.

A handful of online start-ups are already trying to build a profitable business based on an advertising-supported model. So far, they have had mixed results. Yet none of those sites boasts the reach of MySpace, which has 110m users worldwide, or Facebook, which has 66m.

Social networking sites allow consumers to share playlists and recommend songs to friends. Record executives are hoping to harness that behaviour to promote new artists and to drum up sales.

Источник: Financial Times

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