Battling Music Piracy with Free Songs

A recent MSNBC story has reported that the music industry is experimenting with new ways in which to revamp their broken business model by offering “free” music to consumers. In the industry’s battle against piracy, an issue that was frequently referred to in The Long Tail, music revenues have dropped by nearly half over the past decade, 8.5% in 2009 alone, with 2009 U.S. music &licensing revenue totaling $6.3 billion as opposed to $14.6 billion on 2009. By 2014, it is estimated that music and licensing will decrease to around $5.5 billion. In saying this, the big question proposed by the industry is “how to revive the business?” Some feel that answer is to combat piracy with free access to music.

FREEALLMUSIC.com, a site adopting the free approach, allows users to access up to 20 songs per month in exchange for watching a 15-30 second advertisement in order to gain access to the song. Advertisers on board include Coca-Cola, who are reported to have paid nearly $2 per user download with most of the revenue going back to the labels for access to the nearly 10,000 users testing the system. “Consumers win because they’re getting free music and they’re also engaging with brands that they like,” said Brian McCort, Executive Vice President of Business Development for Free All Music. “The labels win because they’re getting properly compensated for their music, and the brands are winning as well.” This is a unique approach that seems to be catching on, now with 100,000 now on FREEALLMUSIC.com’s waiting list eager to test the service.

Guvera, another platform following the same approach that directs users to download free songs from branded sites, is expected to launch in the U.S. next week. Spotify, yet another free music platform based out of the U.K., streams music from all the major labels with advertisements, sharing the ad revenue. It currently has 2 million users in the U.K. and expected to launch in the U.S. later this year.

While this model obviously has it’s high points, is it strong enough to serve as savior to a floundering industry? This question may very well be answered in part by observing the revenue collected by advertisers and the labels alike in the months to come.


Video of the story: http://www.msnbc.msn.com/id/21134540/vp/35912322#35912322