MySpace Music to 'Most Likely' Begin Charging Users
By: Amanda Markell
Last updated November 13th , 2009

MySpace Music is “almost certainly” going to severely restrict free streaming to users, say multiple sources, and move to a paid model.

“They are spending $20 million/month on streaming royalties, and that just isn’t sustainable,” said one source with knowledge of MySpace’s relationships with the labels. Other sources have said that MySpace’s royalty payments are much lower, but don’t deny that the service is a cash hole.

It was commonly assumed that MySpace was an exception because of the fact that it was co-owned with major label groups. Within the past couple of years, MySpace has already suffered falling visitor counts to social network giant Facebook.

MySpace has yet to comment on this story, but reports by MySpace parent NewsCorp Chairman Richard Murdoch has included statements that a free website is unsustainable.

The Google search deal is up next year, and $300 million/year in revenue will evaporate. The last payment of $75 million is due on June 20, 2010. It appears as if the company has a deadline.

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