Good business model or failed concept?

[RawAlex]

http://www.thisislondon.co.uk/news/article-23434386-details/Free+music+downloads+site+in+chaos+as+record+giant s+pull+out/article.do

Qtrax.

"free music supported by ads".

I have to ask the question: If everything in the world was free supported by ads, who would be buying the advertising?

[EmporerEJ]

http://www.thisislondon.co.uk/news/article-23434386-details/Free+music+downloads+site+in+chaos+as+record+giant s+pull+out/article.do

Qtrax.

"free music supported by ads".

I have to ask the question: If everything in the world was free supported by ads, who would be buying the advertising?

Isn't that how radio works? Or DID work?

[KevinG]

Qtrax Has Rough Start As Major Labels Deny Deals With Free Download Service

just hours after the service's splashy unveiling at the global MIDEM music conference in France on Sunday, one that London's Times Online said cost in excess of $1 million and featured hired hands such as LL Cool J and James Blunt as celebrity spokespeople, it seems like there's nothing there. Reuters reported Monday afternoon that the world's biggest music companies, including Warner Music Group and Sony BMG, denied that they have agreed to license their songs to Qtrax.

http://www.mtv.com/news/articles/1580462/20080128/id_0.jhtml

[RawAlex]

Isn't that how radio works? Or DID work?

Not really, because radio has something that download services don't have: your attention every time you want to listen. Unless you are recording off the air, you are pretty much bound to tune in and listen. Basically they are talking about front loading a bunch of ads before (and possibly during) the download process, and then after that you are free to go and listen all you want forever without restriction.

My feeling is that this would have a huge startup volume of business, followed by a slow but steady decline as people download all the free back catalog they want and then drop out of the game. So the business model might be sell the business to some other suckers early for billions of dollars, before it turns into a pumpkin.

[EmporerEJ]

Not really, because radio has something that download services don't have: your attention every time you want to listen. Unless you are recording off the air, you are pretty much bound to tune in and listen. Basically they are talking about front loading a bunch of ads before (and possibly during) the download process, and then after that you are free to go and listen all you want forever without restriction.

My feeling is that this would have a huge startup volume of business, followed by a slow but steady decline as people download all the free back catalog they want and then drop out of the game. So the business model might be sell the business to some other suckers early for billions of dollars, before it turns into a pumpkin.


Yea....but as you say......I'm thinking that's what would happen.

[KevinG]

<tap tap tap> Hello? Is this thing on?

[RawAlex]

<tap tap tap> Hello? Is this thing on?

Yup, it's on. Licensing is always an issue, but if they can raise enough dollars in ad sales to pay the piper, the labels will fall in with it as an income source. But that also points out there sheer size of the problem. From a 99 cent Itunes download, the labels are seeing, what, 40 cents? So each download on this service needs to generate at least 40 cents just to break even on raw material costs. That will mean tons of pages, multiple clicks to get the to the product, probably a zango style toolbar install and every other ugly trick in the book to make the money happen.

I could also see the record labels demanding upfront payment or some sort of set aside account with money to fund this sort of thing.

The record labels are always afraid of free.

[gonzo]

Yup, it's on. Licensing is always an issue, but if they can raise enough dollars in ad sales to pay the piper, the labels will fall in with it as an income source. But that also points out there sheer size of the problem. From a 99 cent Itunes download, the labels are seeing, what, 40 cents? So each download on this service needs to generate at least 40 cents just to break even on raw material costs. That will mean tons of pages, multiple clicks to get the to the product, probably a zango style toolbar install and every other ugly trick in the book to make the money happen.

I could also see the record labels demanding upfront payment or some sort of set aside account with money to fund this sort of thing.

The record labels are always afraid of free.

Record labels payout is more fucked up than the affiliate model in this business.

I hope this upstart looked at some of the front loading issues with ads that Live365.com had. People hate ads but wont pay to get around them...they just listen to something else that is for free.

[RomaCash]

I bet someone will find the way how to 'cut' such ads from music files:)

[EmporerEJ]

<tap tap tap> Hello? Is this thing on?

No...we gave you the soap on a rope microphone.....
But you just go ahead.......as long as you don't drop the soap, you'll be OK.

[RawAlex]

I bet someone will find the way how to 'cut' such ads from music files:)

I don't think they will end up with ads in the files - rather the way to actually download them will be convoluted, in order to maximize page views and such. I also wouldn't be shocked to see paired downloads (ie,you get the mp3 in a zip with a bunch of other stuff) or requiring use of a "downloader" program that is also a Zango style toolbar.

Seriously... coming up with that much money per download ain't easy. This is a business plan I would really love to read.

[Hell Puppy]

I dont get it.

We say people wont pay to get around ads, blah blah blah...

There's pretty good emperical evidence that people will pay to get what they want.

How many of you dont have cable tv? There's free stuff still out there, just hang an aerial in the air, ad powered network tv is still there. And you can even get HD.

How many of you have satellite radio? I know I do, and will never buy another car that doesn't have it. Even though I have at least 30 or so broadcast stations to choose from where I'm at.

[gonzo]

I dont get it.

We say people wont pay to get around ads, blah blah blah...

There's pretty good emperical evidence that people will pay to get what they want.

How many of you dont have cable tv? There's free stuff still out there, just hang an aerial in the air, ad powered network tv is still there. And you can even get HD.

How many of you have satellite radio? I know I do, and will never buy another car that doesn't have it. Even though I have at least 30 or so broadcast stations to choose from where I'm at.

Paying to get what you want vs getting around ads are 2 different issues.

Would you have paid to hear my lame ass ad free when I was talking smack on live365?

Or listen to Headless cackle and call JimTheFiend up at his McDonalds or Capt D's day time job?

live365 for the most part had LAME programming.