Universal Music Group is partnering with new ad-sponsored digital music download service FreeAllMusic.com to let anyone download music from the record label’s artists, which include Lady Gaga, Rihanna, Taylor Swift and Jay Sean.
Via Free All Music’s platform, thousands of tracks will be offered at a rate of 20 free downloads per month, five per week, starting every Tuesday. The recently launched FreeAllMusic.com, which appears to be in private beta, lets users access downloadable, high-quality, iPod-compatible MP3s of advertiser-paid, free, legal, and unrestricted song. The catch: users watch a video commercial per download on the site, Users’ music selections and sponsoring brands are then promoted externally through an opt-in, digital advertising network.
To download a free track, users can select a participating brand and then need to watch a video advertisement from that brand. Brands who are participating in the initial launch are Coca-Cola, Warner Bros, Zappos, Lionsgate, LG, and others.
Universal Music has long been a little trigger-happy on the lawsuits against music and video sharing services (MySpace, Veoh and its investors, Grouper / Bolt.com, etc.), so its interesting that the startup has been able to bring on the record label. With the ad-supported downloads, FreeAllMusic may have found a way around the music label’s onerous fees. According to a New York Times article from December, FreeAllMusic has already signed on another record label but declined to name the new label.++++
UMG Licenses Catalog to Ad-Supported Start-up January 11, 2010 - Digital and Mobile
Labels don't have a whole lot of hope for ad-supported music service, but that doesn't mean they won't license to them still. Universal Music Group just reached an agreement to license music to the latest ad-supported foray FreeAllMusic.com, which launched in invite-only beta mode last month.
From the release: "Through this agreement, thousands of tracks representing many of the world's most prominent artists are being made available now in FAM's current private beta period, where users will be offered up to 20 free downloads per month, five per week, starting every New Music Tuesday. This is based on the usage patterns of a typical "hits-oriented" iTunes customer. FreeAllMusic.com is keeping with its "walk before we run" philosophy in slowly building its user and advertiser base."
UMG's David Ring, executive VP of business development and business affairs, negotiated the deal. In an Q&A with Billboard earlier this year, Ring said the label is open to licensing to anybody, under any model, so long as the deal provides UMG with the right level of compensation. "Rather than picking one horse in this race, we like to bet on a number of them," he says. "If we're right, we'll have a number of horses serving different segments of the customer base and we'll have multiple winners."
Some content deals are more important and others, and on Monday, the ad-supported FreeAllMusic (freeallmusic.com) scored a big one. The company finalized a licensing agreement with Universal Music Group, a great starting point for a broader licensing sweep. The deal was disclosed by FreeAllMusic chief Richard Nailling and UMG eLabs executive vice president David Ring.
Historically, startups have paid handsomely for the right to use maj
or label content. But FreeAllMusic has less cash than its earlier-generation predecessors, and a more relaxed deal may have resulted. The scale of the deal is also unclear. Either way, a partnership with the biggest major helps to pave the way for more majors (and indies, publishers, and others), and also helps to validate the model a bit.
FreeAllMusic has already corralled a number of big-name brands to sponsor its free - and DRM-free - download model. In essence, brands get exposure, while users get a free download for sitting through an ad. As part of the private beta, the site will be giving away 20 songs per user per month - 5 per week - to stimulate consumer interest.
File this one under "the more things change, the more they stay the same." This week, Universal Music Group announced a deal with FreeAllMusic, an advertiser-supported free music site. The news came one day after Digital Music News reported that Universal had filed suit against Grooveshark, another advertiser-supported free music site.
The two sites follow different business models -- FreeAllMusic enables people to download a limited number of tracks for free in exchange for them watching commercials, while Grooveshark lets users play songs on demand from an online jukebox. Assuming the typical licensing deals are in place, FreeAllMusic would pay a significantly higher royalty per track than Grooveshark. Nevertheless, Grooveshark could conceivably generate larger sums for labels by streaming far more tracks than FreeAllMusic's users download..
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