Qtrax is the latest company looking to take a cut of Apple’s iTunes massive digital music market share. The company claims to allow users to legally download for free millions of tracks onto most Microsoft Windows-enabled devices. But at least one similar free music service went bankrupt last month.
Qtrax, located at qtrax.com, says it has licensing agreements with all four major labels: Warner Music Group and Warner Music International; EMI Music North America and EMI Publishing; Sony BMG Music Entertainment; and Universal Music Group North America and International. Additionally, a company spokeswoman says Qtrax is working on a licensing agreement with Apple to enable downloads of music to iPods. She notes that Qtrax is still working on compatibility with other portable devices as well.
Qtrax is the latest in a string of companies offering free music to consumers. Internet radio station Pandora and streaming music service Last.fm are two, but they don’t allow users to download music onto their PCs or other devices.
However, a company similar to Qtrax called SpiralFrog went under March 13, owing investors $34 million. During its brief lifespan of a couple years, the site offered nearly 1 million songs that consumers could download to their hard drives for free. Users also could transfer the tracks to most MP3 players that used Windows Media Player, but the songs weren’t compatible with iPods.
SpiralFrog’s business model was dependent on ad revenue. The downloadable tracks would stop playing if a user didn’t come back to the site and view more ads. After 30 days, users had to re-register before downloading more songs. After 60 days, they could no longer listen to the songs they had downloaded.
A source close to SpiralFrog says the company just couldn’t make enough money to stay afloat, and that, because the company only had deals to distribute music from Universal and EMI, the site lacked many popular songs.
Like SpiralFrog, Qtrax also plans to make money from displaying advertising while users search for and play music. The company says it will share ad revenues with labels and artists. Consumers also will be able to create playlists and share them with friends, as well as purchase music, tickets and related items on the site, Qtrax says. Qtrax, like many free music providers, offers information about albums and bands. The company plans to launch in 10 countries over the next month, followed by a phased global rollout.
"Our users will enjoy the seamless player/browser functionality that is an important part of the Qtrax experience, plus the downloads are lightening fast and delivered to your library ready to play. We are very proud of our unique offering and technology and believe our audience will notice these features and benefit from the advantages Qtrax offers," says Allan Klepfisz, Qtrax president and CEO.
Research firm Jupiter Research, now part of Forrester Research Inc., has estimated 21% of U.S. adult web users are music “freeloaders” who either stream or download free music, rip or burn CDs, or create music collections on their PCs regularly. They also spend on average less than $50 on music in a three-month period, Jupiter says.
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