Free ad supported music is on the way

By February 20, 2008Music

Reported in the FT this morning:

MySpace, the world’s largest social networking site, is gearing up to partner with the major record companies to create an advertising supported service that would allow consumers to listen to music for free on their computers.

The service would apparently be streaming, but maybe with downloads as well, and is dependent on turning discussions with record labels into deals.

Myspace are not the first movers in this space though. Not by a long shot.

Imeem looks like the runaway leader at the moment. They have been going since 2004 with a service that is now very popular. Their alexa ranking is 149, and according to Crunchbase they had 18m uniques in November last year. Interestingly Myspace blocked Imeem in February last year.

Other competitors include we7 and LastFM here in the UK, and a bunch of others in the US, not least Pandora.

This is a busy market, because it is huge. People love to listen to music and I believe that the millions which currently do so illegally will happily revert to a legal service once they find one that is cheap and convenient enough. As I’ve said before I think the winning model will be ad supported streaming, with the ads in the stream.

It is deals with the labels that have been holding a lot of these services back and will be the key for Myspace. Imeem has it’s lead at least in part because it has these already.

  • Nic,

    It’s all about Creative Commons licensing in my opionion. What could be more simple, are we just that attached to the labels that we cannot forsee a future that allows musicians to define how they want their music to be utilised. For instance, Jamendo, is a music discovery site that allows for musicians to distribute their music under defined terms, and allowing consumers to discover and downlaod music for free legally.

    As for other interesting music sites, I’d also have you look at Deezer, which allows you create and share press lists and is also driven by an ad revenue model.

    Unlike MySpace, these sites are dedicated to music, makes the search and the discovery that much easier and more enjoyable. MySpace is not my ideal platform for music discovery or enjoyment. Too much else to wade through before you can actually find anything worth listening to.

  • Nic,

    It’s all about Creative Commons licensing in my opionion. What could be more simple, are we just that attached to the labels that we cannot forsee a future that allows musicians to define how they want their music to be utilised. For instance, Jamendo, is a music discovery site that allows for musicians to distribute their music under defined terms, and allowing consumers to discover and downlaod music for free legally.

    As for other interesting music sites, I’d also have you look at Deezer, which allows you create and share press lists and is also driven by an ad revenue model.

    Unlike MySpace, these sites are dedicated to music, makes the search and the discovery that much easier and more enjoyable. MySpace is not my ideal platform for music discovery or enjoyment. Too much else to wade through before you can actually find anything worth listening to.

  • You are right Nic, the winning model will have ads in the music stream because this is the only way to monetize the time spent listening to the music. This is true for ad-supported downloaded music as well.

    Check out the Ad-Supported Music Central blog:
    http://ad-supported-music.blogspot.com/

  • You are right Nic, the winning model will have ads in the music stream because this is the only way to monetize the time spent listening to the music. This is true for ad-supported downloaded music as well.

    Check out the Ad-Supported Music Central blog:
    http://ad-supported-music.blogspot.com/

  • Hi Nic
    One point for the future is that to the music consumer there will be no difference between stream and download the real winners of the Ad funded models will be those who monetise at a ‘per listen basis’. Although this matches streaming at the moment this will not always be the case. It is essential that we look at models that base themselves on the consumer execution and not the way that technology can deliver.

    Steve
    CEO We7
    http://www.we7.com

  • Hi Nic
    One point for the future is that to the music consumer there will be no difference between stream and download the real winners of the Ad funded models will be those who monetise at a ‘per listen basis’. Although this matches streaming at the moment this will not always be the case. It is essential that we look at models that base themselves on the consumer execution and not the way that technology can deliver.

    Steve
    CEO We7
    http://www.we7.com

  • Lets be clear about one thing… these companies are not offering free music. They’re offering free on-demand radio. There’s a big distinction.

    First – There are already niche players like last.fm and Pandora, but music streamed from a website is not very compelling if I can’t take it with me, or play it throughout my home.

    Second – MySpace can’t even sell it’s existing ad inventory. They have trillions of ad impressions, and no ability to monetize them. It’s doubtful they’ll be able to use their current ad model to support even more services – especially one with such high overhead as free Music.

    Read the excellent analysis of MySpace’s ad-supported music fiasco at http://www.BroodingSavage.com.

  • Lets be clear about one thing… these companies are not offering free music. They’re offering free on-demand radio. There’s a big distinction.

    First – There are already niche players like last.fm and Pandora, but music streamed from a website is not very compelling if I can’t take it with me, or play it throughout my home.

    Second – MySpace can’t even sell it’s existing ad inventory. They have trillions of ad impressions, and no ability to monetize them. It’s doubtful they’ll be able to use their current ad model to support even more services – especially one with such high overhead as free Music.

    Read the excellent analysis of MySpace’s ad-supported music fiasco at http://www.BroodingSavage.com.

  • Hi Bill
    Check http://www.we7.com out we do ad supported downloads exactly so you can take the music with you or playit through the home.
    Steve
    CEO We7

  • Hi Bill
    Check http://www.we7.com out we do ad supported downloads exactly so you can take the music with you or playit through the home.
    Steve
    CEO We7

  • Pingback: Free ad-supported music coming closer to reality « The Equity Kicker()

  • Pingback: Free Mortgage Search()

  • azeemazhar

    It reminds me of this thing we used to call radio

  • I think this is the right model for a lot of web audio companies. Spotify also works this way.

    Nic Brisbourne
    Partner, DFJ Esprit
    Email: [email protected]
    Tel: 07990 567 993
    Blog: http://www.theequitykicker.com

  • Pandora has just started throwing audio ads into its stream to pay for the service. As Azeem says, it's becoming more and more like radio, but with a narrowly defined niche,

  • Tim Jersky

    http://vastfm.com already has legal, free streaming music from every artist. I think it just uses the sound from youtube videos to deliver the songs.

  • Tim Jersky

    http://vastfm.com already has legal, free streaming music from every artist. I think it just uses the sound from youtube videos to deliver the songs.