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MySpace challenges (?) iTunes with indie music store

MySpace logoMySpace has joined the recent crowd of iTunes wanna-be's. MySpace announced Friday that before the end of 2006 it will give unsigned, independent bands a place to sell their music. Musicians will be able to sell tunes on their own MySpace pages and on fan pages. And here's the best news--the MP3's sold at MySpace will not be shackled by DRM and will work on the iPod and other music players. Prices will be set by the individual bands, who will pay a "small" distribution fee to MySpace.

MySpace co-founder Chris DeWolfe told Reuters: "The goal is to be one of the biggest digital music stores out there. Everyone we've spoken to definitely wants an alternative to iTunes and the iPod. MySpace could be that alternative."

Whether a MySpace music store is a real threat to iTunes Music Store is anybody's guess, but I'd say it's unlikely. On the one hand, independent, unsigned artists, no matter how good they are, are not direct competition for established musicians who have the backing of the powerful music industry. And iTMS is so entrenched as the place to go for music downloads that it will be hard to unseat.

On the other hand, in its favor, MySpace has a huge potential customer base for indie music. It's been ranked as the #1 most visited site on the Web and is wildly popular with teens, who are a great market for undiscovered bands. It will have lots of music to offer from three million independent bands. MySpace differs from other iTunes challengers, like Microsoft Zune, and the newly announced Samsung music subscription service, because its offerings won't be locked up by DRM, and MySpace is not controlled by the recording industry (although it is backed by powerful parent company News Corporation).

Should Apple be watching its back? What do you think?

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