MySpace in ad-supported music deal with Sony BMG

NEW YORK (Reuters) - News Corp's MySpace has reached a licensing deal with Sony BMG Music Entertainment to stream music videos from its artists, who include Britney Spears, Beyonce Knowles and Bruce Springsteen.

MySpace, the world's most popular social networking site, said on Tuesday it will share advertising revenue with Sony BMG, which will make its music videos and select audio material available on artists' profile pages to MySpace's U.S. users.

The site has acted as a promotional platform for artists, particularly new and upcoming bands. But to date, MySpace has played a minor role as a revenue source for major music companies.

Instead, MySpace, which says it has more than 200 million users globally including 70 million active users in the United States, has been accused of allowing its users to upload music without authorization.

Last year, Universal Music Group, the world's largest music company owned by Vivendi, sued MySpace for copyright infringement by enabling users to reformat videos to be played back or sent to others.

Sony BMG is the world's second-largest music company and a joint venture between Sony Corp and Bertelsmann AG. Like its peers, it is seeking new ways to make money amid a rapid downturn in CD sales. Sales of digital music have so far failed to make up the shortfall.

Sharing advertising revenue with Web sites that air its videos for free to consumers has been one of the new business models that music companies are exploring.

"This new effort is a great way to build new audiences for our artists, bring value to fans, and offer exciting new opportunities to advertisers," Thomas Hesse, president of global digital business at Sony BMG, said in a statement.

Last month, Warner Music Group and Lala.com said they were experimenting with selling music from top-selling artist James Blunt through his MySpace page.

(Reporting by Yinka Adegoke)