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MySpace is nearing completion of a music deal with Sony BMG and Warner Music Group.

Myspace Logo
(Photo Credit: Myspace)

The deal could become official as early as this week the New York Post is reporting and the service would launch later this year. "Everybody's operating with a sense of urgency to try to close it out," said an insider close to the talks.

Under the terms of the deal Sony BMG and Warner Music Group would trade content rights for a minority stake in MySpace Music and advertising revenues the service aims to generate.

The new MySpace Music is likely to be a combination of pay-per-download and ad-supported video and audio. "The concept of the joint venture is to bring in all forms of [making money from digital music] and much more tightly integrate them," said a person familiar with the deal.

Users will be able to purchase downloads in the MP3 format and view ad supported video along with buying downloadable videos and ringtones.

The two record labels are expected to hold less than a 50 percent stake in the MySpace deal. How much each label receives from MySpace Music will be deiced by market share sources said. Sony BMG is the second largest music label in the world followed by Warner.