FREE MP3’s: WHO CARES?

Posted by | Nov. 2, 2010 | 5,545 views

About a year ago a couple of start-ups announced their intentions to take the US by storm with a completely new take on ad-supported free mp3 downloads. Free All Music of Atlanta, Ga. claimed that they were going to give users free MP3’s by just viewing a little 15 second commercial before each download. Guvera, an Australian company, gloated about raising $30 million and how they were not going to make users suffer through any advertising but instead deliver free downloads though branded channels.

These services promised to do what several others have tried and failed. And by offering the perfect antidote to online piracy they would be the saviors of the music industry.

The main problem with these services is that they can’t offer the depth of catalog that would scale. Add to that the fact that they generally aren’t very hassle-free and user friendly (you can’t just create a queue of downloads and walk away, for instance) and you’ve got a pretty hard sell.

Both Guvera and Free All Music have been in the US for the last 10 moths or so and their traffic stats don’t seem to offer much encouragement for ad-supported downloads. According to Wolfram Alpha, Free All Music has 7600 daily visitors generating 18,000 daily page views. Not very impressive. But Guvera fares even worse with 5300 daily visitors, however those users generate about 32,000 daily page views.

By comparison, paid services generate significantly more traffic. Napster has 250,000 daily visitors, about the same as streaming subscription service Mog with 260,000. Both services dwarf the other new entry into the subscription streaming service space, Rdio, which lags way behind with a mere 48,000 daily visitors. Spotify, which hasn’t even launched in the US, has 950,000 daily visitors, grossly outpacing all of the others, including the ad-supported sites, combined. As Glenn Peoples points out in Billboard this week, Spotify’s user experience makes the difference.

There are so many services out there now and so many ways to get free music by download or streaming that the Guvera’s and Free All Music’s of the world have to struggle to get users. And without traffic advertisers won’t buy in. Judging from the numbers it won’t be long before they join SpiralFrog, Ruckus and Qtrax in the ad-supported music graveyard.

In the midst of this, Limewire continues to insist that they are determined to work with the recording industry on their new music service, Spoon, despite having fired a third of its work force in the wake of being ordered by a federal court to shut down. I don’t know if this is cynicism or sheer fantasy.

Either way Limewire owner Mark Gorton will have an easier time holding on to his millions than making Spoon fly.

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Posted by on Nov 2 2010. Filed under Business Models. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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