Cathay Pacific's new Economy Class

Really free

Yesterday's Post Magazine reprinted an article from The Guardian (Listen now, pay never) about "free" music:

From the newspaper on the train to the magazine thrust in your hand as you leave the station, from the targeted ads that accompany your browsing to the ad breaks that punctuate your TV viewing, advertising-supported content is nothing new. Ever since ITV's launch in September 1955, viewers have broadly accepted that in return for watching advertisements, they can view the programmes that follow for nothing.

Now enabled by technology that allows advertisers to target consumers more precisely and efficiently than ever, the concept is spreading. From free, legal music to free mobile phone calls and texts, from online games featuring targeted ads to free movie downloads, a glut of startup companies aim to apply the same principle that led to the ITV of old becoming a "licence to print money".

Except that the references to ITV became "commercial TV" in the SCMP, but I'll come back to the changes made by the SCMP later.

Steve Purdham, chief executive of the Peter Gabriel-backed ad-funded music service We7, is troubled by the word free. "People will either pay for something with money or they will pay for something with their time. Music should never be free. There is too much value in its ability to make the hairs stand up on the back of your neck," he said.

Ah, but that's the problem, isn't it?  Music is free now - if you want to download it you can do so very easily without paying.  So what's the advantage of a website that offers free downloads but generates revenue from advertising?  If I want to pay for music I'd rather have the opportunity to give money directly to the artist - something that bands such as Radiohead, the Crimea and the Raconteurs (Indie band bypasses critics by releasing album direct to fans) have started to explore.

Artists have to find new ways of generating revenue (see Free doesn't mean worthless), and ad-supported websites probably aren't the answer.

Talking of which, I notice that the SCMP have removed the unkind words about Qtrax that were in The Guardian story:

The concept of ad-funded music downloads exploded into the mainstream in January when QTrax, a US service promising unfettered access to any song in return for displaying adverts while they downloaded, announced its launch at a music industry conference in Cannes.

The next four paragraphs were cut by the SCMP (apart from the technical explanation about peer-to-peer):

The executives behind the service claimed this was the way to capture a slice of the revenue that had been pouring out of the industry at an alarming rate. They would piggyback on an existing peer-to-peer service, but screen all files. Users would download a Qtrax media player that would store tracks and, in time, be able to transfer them to an iPod or other digital music player. More incredible still, they claimed to have agreed deals to license tracks from every major label. It all sounded too good to be true. And it was.

The major labels revealed that they hadn't yet reached deals with Qtrax, or that existing agreements had expired. Negotiations are ongoing; last week the company announced deals with EMI and Sony's publishing arms.

Chief executive Allan Klepfisz admitted that the fiasco, during which it burned hundreds of thousands on sponsorship, billboards and parties featuring the likes of James Blunt, had left it looking "pretty foolish". Klepfisz said he didn't believe advertising alone would be enough but reckoned on affiliate deals, the sale of concert tickets and merchandise to make up the difference.

While many remain sceptical about the prospect of QTrax ever launching on a meaningful scale and others suspect the plan is to agree as many licensing deals as possible before selling up, Klepfisz insisted he was in it "for the long-term". At the start of this week, it took a step forward by signing a deal with Beggars Group, the UK independent that has the White Stripes and Radiohead among its artists.

And to be fair, Qtrax do appear to have made a little more progress in last 2-3 weeks, but the website seems more 'smoke and mirrors' than anything substantial, so the cynicism expressed in the original story still seems valid (but, hey, I'm a cynic).

The problem for these new services, and the advertisers who have signed up to them, is that the most attractive audience are the ones who seem to have fewest qualms about downloading illegally. And even the prospect of listening to a 10-second advert, or having to re-dock their MP3 player to refresh the DRM on tracks they have downloaded, may be enough to keep them away.

Well, yes, exactly.


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