Good business model or failed concept?

[gonzo]

Originally Posted by RawAlex

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.