LOS ANGELES — 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 more likely to work, because the startups have found advertisers that are willing to pay around $2 to have a moment of a viewer’s 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 $1.29.
“You pay for the song by paying attention to the advertiser,” said Richard Nailling, chief executive of FreeAll-Music.com, which launched an invitation-only test of its service in December. “It’s a fair trade of attention for music.”
Both Free All Music and another new free site, Guvera.com, have licensing deals with independent labels and two of the largest recording companies, Universal Music Group and EMI Group PLC. That’s good news for fans of U2, Black Eyed Peas and Norah Jones. But admirers of Ke$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.
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. Onesuch site, imeem, was on the verge of collapse before it was bought last year by MySpace 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. Aspiring users 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.
Business, Pages 20 on 02/22/2010