Free Music At a Price - Company Business and Marketing

Industry Standard, The, Sept 18, 2000 by Hane C. Lee

The ability to offer a subscription service that keeps interest from waning is one of the biggest challenges. "There's a danger of going out with a boring, bland, all-you-can-eat model - [that] consumers will reject it, and then everyone will say subscriptions don't work," says BMG's Slatoff.

Other music executives say that charging consumers track-by-track -- the method favored by the major labels -- won't cut it, either. "We're all for free music in this whole debate. This medium needs to mature -- not put up all sorts of roadblocks in the consumer experience," says Steve Gottlieb, president of TVT Records. At the same time, he says, "we have a serious obligation to make sure our artists earn every penny they can." The label, which represents artists from Guided By Voices to DJ Hurricane, filed its own suit against Napster in June. Gottlieb hints that TVT is working on its own ad-supported model for downloads that would compensate artists, which should debut in the next two months.

Some music industry observers say that, combined with a powerful peer-to-peer distribution mechanism, adsupported downloads could generate serious cash.

"I see [the feels-free model] as one of the possibilities of a real file-exchange system solution," says Scott Ross, director of new media at Moonshine Music, one of PlayJ's affiliated labels. In fact, PlayJ inked a deal in late July to add its downloads to CuteMX.com, a directory of media files for the CuteMX fileexchange client. (Within days, CuteMX parent GlobalScape disabled the peer-to-peer system over copyright concerns.) "PlayJ is helping move [file-swapping] along by coming up with a solution more amiable to labels than just doing it for free."

That, after all, is where all the trouble started.