Two new companies are giving consumers a way to download songs for free by watching a few ads. The idea has been tried before but this time it appears it might work, because the startups have found advertisers that are willing to pay around $2 to have a moment of your time.
That means recording companies can get about as much compensation from the free services as they receive from a download on iTunes that costs the consumer $1.29.
“You pay for the song by paying attention to the advertiser,” said Richard Nailling, CEO of , which launched an invitation-only test of its service in December. “It’s a fair trade of attention for music.”
Both Free All Music and another new free site, , have licensing deals with independent labels and two of the largest recording companies, Universal Music Group and EMI Group PLC. Fans of U2, Black Eyed Peas and Norah Jones should be happy. But admirers of Ke$ha or Sade, both with Sony Music labels, will be out of luck for now.
The new services come after years of falling CD sales. More people are consuming music online but spending far less for it.
In response, recording companies have been licensing songs to an array of Internet businesses that offer songs cheaply or for free — in the hope that these legitimate alternatives can keep people from turning to illegal downloads.
Unique advertising
But some sites that allowed free listening on computers couldn’t generate enough advertising revenue to cover their debts or pay royalties that were required every time someone played a song. One such site, imeem, was on the verge of collapse before it was bought last year by My- Space Music.
The new services have tried to come up with unique advertising packages so companies are willing to pay more. And they are putting the money toward offering downloads of songs that can be put on portable devices.
They also have made changes to deal with a problem that helped cause another free- download site, SpiralFrog, to croak last year. SpiralFrog irked users because its songs expired if people failed to log back on every few months to view more ads. Its songs also couldn’t be played on iPods or iPhones.
Free All Music and Guvera let users play songs on any device. The users also don’t have to deal with copy protection software that requires checking back in with the service. So-called digital rights management software is on the way out after Apple Inc. ditched the copy-protection technology in iTunes last April.
Free All Music and Guvera are privately funded and in a beta testing phase with just a few thousand users. Wannabe joiners must register and then clear a waiting list before getting invited. That lets the sites make sure there are enough advertisers to pay for the songs that will be downloaded.
The 46 advertisers that have signed up for Guvera’s test in Australia are paying on average $4 per visitor, contributing $250,000 so far. As the service expands to the U.S. at the end of March, Guvera plans to add users in tandem with more advertisers.
“Everything’s about a controlled, sort of old-school business model of: Build one product, find one customer, sell it. Then build two products, find two customers, and sell it,” said Guvera’s founder and CEO, Claes Loberg.
“If we have enough to support a million people, that’s all we’ll open the door to, even if we have 5 million sitting in the background waiting to get in.”
Song royalties are paid per download, in the range of 70 percent of the retail price of a song. So advertising revenue should be able to cover what the track would have made if it were sold for $1.29 on iTunes.
Free All Music is the easier to navigate of the two.
Users can type in search terms to find a song, or can pick one from a list of top hits by genre.
They then pick from a range of advertisers, including Coca-Cola Co. and Zappos , the shoe and apparel retailer now owned by Amazon Inc. Users watch one video ad featuring that brand. One click later, and the song downloads to the user’s computer and can be transferred to a portable device. Users can download a maximum of five songs a week; the cap is reset every Tuesday.
Advertisers on Free All Music pay about $2 per song for the right to present users with one video ad. That’s much higher than general ad rates online because the users have indicated they are inclined to hear from the company. Users must click again to start the download, and they’re reminded who is providing the song.
The downloads
The hardest part about both and is clearing the waiting list to get invited to join. After that, there are two ways of finding songs to download.
AT :
Users can search by song, artist or album or can pick one from a list of top hits.
Then they pick a song and choose from a range of advertisers to sponsor the download. Users watch one video ad featuring that brand. One click later, and the song downloads to the user’s computer and can be transferred to a portable device. Users can get five songs a week.
AT :
Users must fill out a profile and list favorites in an array of categories from food to music. People who fill out more surveys get more credits to spend on music, but it also makes them better subjects for targeted ads. The credits can eventually be tapped out: Companies sponsor only a certain number of downloads per customer.
Searching for a song brings the user to a list of advertisers willing to sponsor the download. After clicking on one, the user is taken to an advertiser- branded page and can download from there. However, just getting there can be tricky. The company is working on making navigation easier to understand.
