The much-ballyhooed launch of MySpace Music is finally here. The social networking giant is announcing its partnership with all four major labels (EMI was the last holdout) along with the largest independent music distributors (The Orchard, Alternative Distribution Alliance, RED, Fontana, and Caroline).

The new service will allow fans to stream an artist’s entire catalog for free (with an option to buy, of course). But the industry isn’t ready to accept the notion that there’s no monetary value to its music. “Rather than offer one way or the highway, we need to come up with new methods to drive income,” says Rio Caraeff, an exec VP at Universal, which boasts forthcoming albums by Fall Out Boy and U2. “We can’t afford to say no, we have to figure out 10 ways to say yes. That’s really the shift.”

Industry observers acknowledge that the site will take time to gain

footing in this iTunes-controlled universe. Another challenge:

convincing people that MySpace can be a commercial venue. Says Eric

Garland, CEO of online media measurement outfit BigChampagne,

“It seems smart to put a retail store in the middle of all that, but we

haven’t given our credit card to MySpace in the past. It’s not an

ingrained behavior, so that’s the challenging part.” Caraeff asserts

that the success of iTunes only widens the playing field for others to

jump in. “When you know what you’re looking for, iTunes is great,” he

says. “But it’s not where my friends are. It’s not the hub of my social

life. MySpace Music is about serving everyone else who’s not on iTunes.

It’s apples to oranges, not apples to apples.”

So will the new MySpace — which goes live overnight, according to reports — launch

with a bang or a whimper? By virtue of its user base, says Garland, it

will automatically become a major music retail player, right behind

Apple and Amazon. “I don’t know if they’re going to sell a lot of

music, but finding the answer to that question is going to be one of

the more interesting music plays for Popwatchers that we’ve had in a

long time,” he says. “Who knows, we might be laughing in a few weeks,

like, ‘Wow, that didn’t take well.'”

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