Los Angeles - News Corp.'s (NYSE: NWS) MySpace launched its new music service without having first secured deals with top independent labels such as Beggars Group, Domino and Koch, a move that Merlin, the independent rights body that represents them, called "incredibly disappointing." MySpace Music is a joint venture between the social network and major labels Warner Music, EMI, Universal Music and Sony BMG, and these labels and their artists will therefore share in the revenue generated by the service.

Merlin says its labels represent 9% of the U.S. digital music market.

So far, independent labels have not been offered the same terms, according to Merlin.

"What is absolutely clear, however, is that any independent deal struck without an equity component (as was done with the majors), will see independent labels face a situation whereby their major competitors will profit from the use of their repertoire without an appropriate upside opportunity being extended to them by MySpace Music and its Major Label equity partners," said Merlin CEO Charles Caldas.

"Whilst Merlin continues our negotiations, we remain extremely concerned that with MySpace Music the major record labels are acting not only as competitors, but through their equity stakes in the venture, as the clients/end user as well."

It is unclear whether The Orchard, a digital distributor of mainly independent-label music with whom MySpace did reach at least a licensing agreement for the service, was offered any equity in the joint venture.

Poll: Should Indie Labels Get An Ownership Stake in MySpace Music Along With The Majors?

Related Links:
http://www.musicindie.com/news_show.asp?id=135

http://snipurl.com/3uht4 (Ars Technica)

http://blog.wired.com/music/2008/04/myspace-music-w.html

http://snipurl.com/3uhte (Macworld)

http://www.merlinnetwork.org/home