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My announcement for FreeAllMusic's deal with Universal Music Group hits big

FreeAllMusic Signs Up Universal Music For Ad-Supported Downloads

by Leena Rao on January 11, 2010

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.

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UMG Licenses Catalog to Ad-Supported Start-up

January 11, 2010 - Digital and Mobile

By Antony Bruno, Denver

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."

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FreeAllMusic Seals Universal Music Licenses...

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.

At present, a formal release date remains undetermined, though earlier, the company pointed to a first quarter launch. "FreeAllMusic.com is keeping with its 'walk before we run' philosophy in slowly building its user and advertiser base," the company shared.

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Two steps forward, one step back for online music services

[EXCERPT]

January 12, 2010 | 5:45 pm

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..

FreeAllMusic, which is still in invitation-only trials, lets users download up to five free MP3s per week. The catch: They have to watch an ad from the sponsor of their choice before starting each download. (The company also compensates sponsors by running ads for them on a network of other websites after each download.) CEO Richard Nailling said the company hopes to open the service more broadly next month, but the number of users it can support will depend on the amount of advertising it attracts. The companies now sponsoring downloads include Coca-Cola, LG, Zappos.com and Lionsgate.

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MORE STORIES...

Digital Media Wire
Musicweek
Mobiletor
Hypebot
Atlanta Journal-Constitution
Digital Music Trends podcast

Break out Free All Music's seed capital funding all over the viral web

Free All Music to offer free MP3s, new ad model

Free All Media, an Atlanta-based start-up, is the latest company to propose an ad-supported music downloading service. The company, which just announced its first seed round of funding Wednesday and expects to begin public beta testing by December, hopes to differentiate itself from flameouts like SpiralFrog with a unique advertising model that asks users to participate more directly in choosing the ads they'll see.

The company's CEO, Richard Nailling, explained how the company's Web site, Free All Music, will work. Users will select an MP3 they want to download and a sponsor they'd like to "buy" that MP3 for them. They will then watch a video advertisement, between 15 and 18 seconds in length, from that advertiser. Once the ad is completed, they'll be free to download the file, a 256kbps MP3 with no copy restrictions. No further advertisements will be served for that download.

But here's the unique part--Free All Music will then use the downloader's handle in other banner ads for that sponsor, which Free All Music will place around the Web using an (as yet undisclosed) third-party ad network, as well as through its own ad network, which will focus on music-oriented sites. In other words, you might be visiting CNET and see "MattR just downloaded 'Angry Chair' by Alice in Chains...sponsored by Converse." In this way, Free All Music will be able to sell multiple ads per download and perhaps earn enough money to cover the license fee for each song.

There's a catch, of course: users will only be able to download as many songs as Free All Music can sell sponsorships for. At launch, the company is aiming for what Nailling calls "typical iTunes behavior," which is 15 songs per month, spread over three sessions. If the site takes off and advertisers buy more space, the song allowance will increase.

The key to success will be whether the company can get all four major labels and enough indies on board to make for a competitive selection of music. So far, the company claims it's signed up one major label (unnamed), and is aiming for the "full digital catalog" from each label, giving it full parity with iTunes and sites like Amazon MP3.

Would you be willing to sit through an 18-second video ad in exchange for a perfectly legal and guaranteed legitimate MP3? Or will you stick with file-trading networks?

Correction at 7:13 a.m. PDT October 1: This post incorrectly stated the number of free songs that Free All Music aims to offer at launch. The site plans to offer 15 free downloads per month, spread over three sessions.

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New Ad Supported Music Downoad Site FreeAllMusic.com Gets Seed Funding

PLUS A Q & A With CEO Richard Nailling

Free All Media has secured seed funding to launch its FreeAllMusic.com ad supported free digital music service in late 2009. The initial round includes founding investor, Scott Barber, CEO of Reform Records, and Free All Media’s CEO Richard Nailling. FreeAllMusic.com will offer ad supported songs without DRM for free download.

The FreeAllMusic pitch is that all previous ad-supported download services have been too cumbersome, too restrictive, or too limited in content. No one to this point has offered DRM-free music downloads with an easy, no- gimmicks process.

The fact that neither of the top execs come from the music industry could offer fresh perspective. CEO Nailling worked in Hollywood in TV and interactive and #2 Brian McCourt helped fund the original "Blair Witch Project" and is a long-time brand sales veteran and consultant.

In an exclusive interview, CEO Richard Nailling explained how FreeAllMusic.com differs from other free music sites:

Q: Are the downloads ad supported?

NAILLING: Yes, each individual download is sponsored (purchased for the user) by a brand. The chosen sponsor owns 100% of the download sequence on our site.

Q: How are the ads positioned or added?

NAILLING: One (required) video Ad (15-30 sec.) will be shown on our site to the user before the song is downloaded. No more ad viewing is required or contained in the song file itself. While the song is downloading the user will also be exposed (exclusively) to other clickable display ad units from that brand sponsor. User-informed promotional ads outside FAM are also part of the display ad package for advertisers, but our FAM user does not see those ads.

Q: Have any major labels signed on?

NAILLING: We have one major label signed and intend to have all four majors signed by our launch date.

Q: How have publishers reacted?

NAILLING: We are not a streaming site. Downloads only. Publishing is covered in our label deals.

Q: Do you see Spotify and other streaming services as competition?

NAILLING: We are building a free site that works for both advertisers and consumers. In the major streaming models advertising is looked upon as the ‘necessary solution’ for funding the free model while they try to convince users to pay. In addition, streaming audio sites are not a truly effective medium for digital advertisers. People don’t watch banner ads while they stream music.

Downloaders are much more willing to watch and be engaged with advertising in return for the content.

We’re a site that people will visit to get (permanent unrestricted ownership) of the hits for free, and they’ll trade a little of their attention as part of the deal. We will make it easy for our users to get a weekly dose of the top 20 hits (in their favorite genre) and get free, legal ownership of those tunes in an easy and entertaining way.

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Free All Media Raises Nearly $1 Million For Ad-Supported Digital Music Downloads

Free All Music is a new digital music startup that plans to make money by getting people to watch ads in exchange for track downloads. If it sounds familiar, that’s because it’s the business model that startups like SpiralFrog tried and failed at—all while blowing through tens of millions of dollars. But Free All Media managed to get some investors to buy in to its business model; the startup has raised a seed round of funding that an SEC filing shows was worth at least $990,000.

CEO Richard Nailing said he and co-founder Brian McCourt invested nearly $1.5 million of their own money since the Atlanta-based startup was founded in mid-2008, but wouldn’t comment on the amount of this new round, which was led by private investors. The team thinks its music site will succeed because it’s monetized on a cost-per-action (CPA) vs. cost-per-impression (CPM) basis; users have to watch a 15-second online video ad for every DRM-free track they want to download. Nice premise—but there are a few reasons why the site has a steep uphill battle.

—Interaction vs. Scale: Any site that wants to attract advertisers needs to prove it can build a large user base first, but Nailing’s sales pitch was about user interaction vs. scale. Free All Media will charge advertisers on a cost-per-download basis and users get to pick which ads they watch. AdPerk, a startup launched in 2007, tried the same model, but gave ad viewers mini-subscriptions to various magazines instead of music. (It seemingly hasn’t gained much traction since then).

—Some display: Free All Media will also promote the site through search and social media ads, and Nailing said the company will supplement brands’ CPA buys with impressions. After a user downloads a track, the company will promote that download in a banner ad somewhere else on the web.

—Privacy: But that sounds like Beacon, the ad platform Facebook tried and got lambasted by users for. To avoid a backlash, Nailing said users need to give the site permission to publicize their downloads when they first sign up. “You agree that you’ll be cookied, we can store your preferences and that we can use your registered user name in the banners,” he said. “It’s part of the fair trade.”

—Licensing : Nailing said the company had just closed its first deal with a “major” label, and was in late-stage negotiations with “three others;” some of the funding was used for up-front payments for the licensing deals. This is one of the biggest hurdles that a music startup has to face—cutting licensing deals that don’t wind up bleeding it dry. Free All Media seems to have come up with a patchwork of solutions that it hopes will be able to solve the problems that have plagued other digital music startups.

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Breaking GroupM/WPP's investment into client INVIDI appears in Wall St. Journal, NY Times, Reuters, Ad Age, Adweek, PaidContent, NewTeeVee, and more

THURSDAY, DECEMBER 13, 2007

WALL STREET JOURNAL

Group M invests in TV ad targeting firm.

WPP Group's Group M plans to announce today that it is leading a $25 million investment in Invidi Technologies, which provides television-ad-targeting technology to cable, satellite and telecom companies. Invidi's technology helps those companies identify viewers so that advertisers can reach them with specific commercials according to their profiles. The other investors include Menlo Ventures, InterWest Partners and EnerTech Capital. Group M declined to say how much of the $25 million it was investing. Group M is the parent company of four media-planing firms, including MindShare and Mediaedge:CIA, that collectively account for about $58.8 billion in annual ad spending globally.