Updated: MySpace Music Deal With Three Labels En Route; Expected Thursday

This story was written by Staci D. Kramer.

MySpace has scheduled a call this morning at 11 a.m. eastern with Chris DeWolfe, co-founder and CEO, MySpace, and Amit Kapur, COO, MySpace. No music execs are listedand in keeping with the emphasis on this as a MySpace gig, no senior execs from News Corp

The idea of a MySpace Music JV with the labels is about to become realityat least, as far as announcing it goes, Reuters is reporting and we have confirmed. Possibly as soon as the next couple of days, News Corp (NYSE: NWS) will announce MySpace Music with three equity partnersVivendi's (EPA: VIV) Universal Music Group, Warner Music Group (NYSE: WMG) and SonyBMG. EMI Group is not on board at this point. News Corp is declining to comment.

The actual launch date of any service is still a mystery. What we can report is that it will be a separate company with the assets of MySpace Music and its own management team. And, unlike the News Corp-NBCU JV Hulu, it will have a name from the beginning: the instantly recognizable brand of MySpace Musicand tens of millions of unique users.

The original concept, as we reported in February, had News Corp and MySpace maintaining operational control but it's unclear whether that has held as part of the agreement. Also unclear: if the settlement with Universal over its lawsuit against MySpace has been signed, although it's expected that will have to be settled for this to move forward, and how the financing will work beyond sharing in ad and download revenue.

Update: Peter Kafka reports that the Universal settlement involves a "huge" cash payment and that the others will get smaller amounts as part of their involvement. (My understanding is that if there are upfront payments, they would be advances.) Kafka also says MySpace will control and operate.

One music industry insider I spoke with said he expected the deal would allow MySpace Music to be able to avoid the per-stream payments other services have to make. He also found fault with comparisons to Hulu, saying he did not expect MySpace Music to do licensing for the labels like Hulu. Instead, he sees it as a "better license deal" for MySpace that will give it a chance to be economicalif it can generate enough ad revenue.

We've confirmed more details: This is a moving target ... According to sources familiar with the negotiations, the announcement could be as early as tomorrow. It's also possible that only two of the three will be on board by then. Some more details:

-- The labels will be equity holders and licensed content holders. Whatever content is available with third parties will be available to the JV. The content deals, which cover music and video, are long-term. I was told not to assume the JV won't have licensing right to make distribution deals.

-- The labels will share in revenues. The suggestion is that they will get two bitesequity and licensed.

-- There will be a CEO search a la Hulu, with the CEO reporting to MySpace CEO Chris DeWolfe, who has been hands on throughout this process. 

By Staci D. Kramer