QTrax Reported To Have Deal With Sony BMG
April 24, 2007 at 5:47 AM (PT)
THE NEW YORK TIMES reports that, for years, music labels have been trying to prevent fans from downloading their songs on peer-to-peer file-sharing networks. Now, some of them would like to encourage people to listen to music that way, provided they view some advertising first.
Several start-up companies are pursuing the idea of advertising-supported music, including SPIRALFROG and RUCKUS, which caters to college students. QTRAX, one such company that plans to open for business in SEPTEMBER, already has deals to sell music from WARNER MUSIC GROUP and EMI GROUP, and it plans to announce a similar deal with SONY BMG MUSIC ENTERTAINMENT today.
ALLAN KLEPFISZ, the company’s Pres./CEO, said QTRAX was in negotiations with the fourth major label, UNIVERSAL MUSIC GROUP, and MERLIN, an agency that represents many independent labels.
Advertising revenue would be used to compensate the music labels that make their songs available, just as television commercials fund the production of shows. And though labels have been reluctant to legitimize the idea of free music, they are also extremely eager to find new business models. Sales of compact discs are down sharply so far this year after previous declines, and revenue from online music stores, such as APPLE’s ITUNES, is not growing fast enough to compensate.