The recently formed Merlin, a coalition of indie labels gathered to secure licensing deals, signed a deal with Snocap that will allow Merlin's member labels to sell their songs at MySpace (read Reuters article). The artists will use Snocap's MyStore to sell downloads from their MySpace pages. The deal with launch in the "near future."

The article says the songs will be sold in MP3 format.

A couple thoughts on this. First, the importance of this deal is counter to the frequent claims that MySpace has peaked, or that it has no competitive advantage in the Web 2.0 space. In music ciricles, MySpace is incredibly important. It's at the top of the social networking heap, and it is adding innovations. Second, I hope Snocap reports these sales to Soundscan. Third, the MP3 side to the story is sure to get a lot of attention. Many Merline labels, though, already sell MP3s via eMusic. This development isn't as much about the format as it is distribution. For digital music to grow, points of purchase need to be user-friendly and nearly ubiquitous.