With Ads, Music Downloads Sing a New Tune
ON Hulu, the popular Web site that streams free television shows and other video, users have proved to be perfectly willing to watch short commercials, and a new site is betting that the same willingness will apply to downloading music.
FreeAllMusic.com, which began a test version for invited users on Dec. 22 and plans to open to the public in January, will allow users to download songs, which may be copied and shared — unencumbered, in other words, by digital rights management restrictions.
In return, instead of paying 99 cents a song as on iTunes, users must first watch a 15- to 30-second advertisement.
“It’s iTunes meets Hulu,” said Richard Nailling, chief executive of FreeAllMusic.
Two of the four major labels have signed with the service and will provide their full digital catalogs, said Mr. Nailling, who declined to name the labels. Six advertisers are on board for the site’s debut, he added, including Coca-Cola, Warner Brothers Television and Zappos.com.
The service hopes to draw “casual pirates who, for whatever reason, are not paying for music,” Mr. Nailling said in a telephone interview from Atlanta, where Free All Media, the parent company of the venture, is based. “We have made this process easier than stealing.”
The prospect of earning money for songs that are now being illegally downloaded is, of course, what drew labels to the start-up.
Advertisers, meanwhile, like the assurance — take that, Tivo — that ads are being viewed.
For each download users will select from about a dozen ads to view, and if, say, they choose Coca-Cola, then the company pays for that song in what the site calls a microsponsorship.
“If people opt in to see your ad, then they’re more receptive to your message,” said Julie Coulton, a senior vice president at Mullen, Boston, the advertising agency representing Zappos. “You have a much more qualified, leaning-forward viewer, a much more engaged consumer.”
With the popularity of online music services like iTunes and Pandora, which principally streams music free to computers or smartphones and is supported by banner ads, many companies have sought ways to profit from digital music.
But until now they have mostly been tilting at windmills. SpiralFrog, which also offered a free music download service supported by banner ads, failed spectacularly, shutting down in March after losing $26 million on revenue of just $1.2 million in 2008, according to income statements acquired by CNET News.
“The online music industry remains as risky as walking through a minefield punch-drunk,” Om Malik, the founder of the technology site GigaOM, wrote recently.
But Steve Yanovsky, founder of Brand Alchemy, a digital media and music branding agency, said that unlike SpiralFrog, whose songs were protected by digital rights restrictions, played only on PCs and required downloading software, FreeAllMusic offers shareable downloads that will work on Apple devices as well as PCs and requires no software.
And because the site will let brands align themselves with music lovers, Mr. Yanovsky sees parallels with how Mountain Dew endears itself to action sports fans through the sponsoring of Dew Tour competitions.
“Brands have got to get out of the way and be facilitators,” Mr. Yanovsky said.
To promote itself, along with the record labels and advertisers, the site plans to recruit users themselves. After downloading a song, users will be asked if they wish to post the details to their Facebook profiles and Twitter streams, and if FreeAllMedia may feature their song and user name in banner ads on other Web sites, as in, “Andy N just downloaded ‘I Wanna Be Sedated’ by the Ramones courtesy of Zappos.com.”
Some bristle at that prospect, like Paul Bonanos, who, also posting on GigaOM, wrote, “I don’t think anyone will be too enthusiastic about his screen name appearing in banner ads all over the Web.”
But Mr. Nailling of FreeAllMusic emphasized that such ads would appear only with users’ approval.
“We think some portion of our users — not all — will like the fact that they’re being influencers,” Mr. Nailling said. “We think that might be compelling to users.”
It’s certainly compelling to advertisers, whose reach will extend to social networks like Facebook, where, if friends opt to download the same song, they must first watch the same ad.
The service is tinkering with how many downloads it will permit, and initially is allowing 20 monthly, and no more than five a session.
Within six months, FreeAllMusic aims to be smartphone compatible, meaning users could download music (and view compulsory ads) on iPhones and other devices.
Jim Lesser, executive creative director at BBDO West, based in San Francisco, has yet to sign any of his clients to the site, but likes the prospect of consumers in one sitting viewing as many as five spots, which advertisers could present in a specific order.
“You could tell a story in a serial fashion, and you’d have a good shot of them viewing the whole campaign,” Mr. Lesser said.
It also could be a litmus test.
“It’s a great thing for advertisers because, at the very least, it will give them a sense of how relevant they are to consumers,” he said. “It puts the pressure on to be fun and exciting to watch, or else people aren’t going to watch them — but in return they’ll get eyeballs glued to the message.”
While Motorola and Apple have been battling it out over the best smartphone, RIM has been quietly improving its BlackBerry devices. According to market research firm YouGov's BrandIndex report, BlackBerry's "satisfaction" scores have doubled since the summer to a year-to-date high.
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