MySpace makes music play vs iTunes (and the rest of the music industry)

Three million bands. 107 million fans. What are record companies for again?

Social network MySpace is to sell music, taking on market leader iTunes. Reasons to be fearful for Apple, according to Yinka Adegoke at Reuters include:

...unlike many other start-up rivals, it already boasts 106 million users, as well as the backing of parent company News Corp....
...MySpace.com has become the single most visited Internet address among U.S. Web users....
...Before the end of 2006, De Wolfe said MySpace will offer independent bands that have not signed with a record label a chance to sell their music on the site. MySpace says it has nearly 3 million bands showcasing their music.

Imagine the Arctic Monkeys or Lily Allen but instead of the happy ending being "after making it big on MySpace they secured a record contract and sold millions" it was simply "they made it big on MySpace and sold millions".

MySpace will need to keep the record labels onside for a while (which shouldn't be hard as they need the oxygen of its publicity) but ultimately, with a community of music fans this big they don't really need the rest of the music industry. Everything can be done in the network by the network.