Jonathan Richards, Dan Sabbagh and Adam Sherwin in Cannes
We've made some changes
to The Sunday Times
A website which promised to give music lovers the world's first legal file-sharing service was forced into a humiliating climbdown today after it emerged that the company had not secured the backing of the record industry.
Qtrax, a New York firm, unveiled its service with a glitzy £500,000 launch in Cannes at the weekend, hiring stars including James Blunt, LL Cool J.
Today it emerged that none of the four major labels had done deals with the site, putting a large dent in the promised catalogue of 25 million songs and prompting allegations that the site's founders had misled fans.
EMI, Warner, Sony BMG and Universal all confirmed that they had not agreed deals with Qtrax which would allow fans to download their music for free in return for being exposed to advertising on the site. Warner and Universal said that they were in negotiations with the site.
Qtrax's founders insisted that they had not misled fans, and that they would not have launched the service if they had not secured the backing of the industry. They admitted, however, that the "ink hadn't dried" on some of the deals.
Qtrax executives spent an estimated £500,000 at a music conference in Cannes trying to convince the industry that their site would allow labels to begin recovering the losses that have resulted from widespread illegal downloading and the subsequent decline in CD sales.
The site purports to work by allowing fans to download and own songs that they could play on their portable media players – for free – so long as they put up with a limited amount of advertising on the Qtrax site while searching for songs.
A spokesman for Universal, the largest of the labels, told Times Online today that it was "in discussion" with Qtrax, but that no agreement was in place. A source at Warner said: "Warner Music Group has not authorised the use of our content on Qtrax's recently announced service."
Both Sony BMG and EMI also confirmed to Times Online that Qtrax did not have the right to use their recorded music catalogue - contradicting a statement on Qtrax's site, which was down periodically during the morning because of 'overwhelming demand', that its users would have access to 25 million songs.
Questioned by The Times in Cannes today, Alan Klepfisz, Qtrax's flamboyant chief executive, insisted that he had not misled the industry or music fans.
"We are not idiots," he said."We wouldn’t have launched the service in front of the whole music industry unless we had secured its backing. We feel we have been unfairly crucified because a competitor tried to damage us. Everyone is very upset."
Mr Klepfisz's company put posters in Cannes claiming that the launch of the service would be the "second coming," and hired stars including James Blunt, LL Cool J and Don Henley of the Eagles for the event.
"We do have industry agreements including the major labels. Even today we are working on more deals," Mr Klepfisz said. He added that although "ink hadn't dried" on some of the deals, Qtrax still planned to deliver on its promises "within months."
The music industry has for a long time been flirting with the idea of delivering songs 'for free' via the internet and making money through advertising, but so far all the sites which offer such a service let listeners 'stream' songs, rather than download them.
The advantage of streaming – for the record labels – is that the user must be connected to the internet while they listen, meaning that ads can be delivered during the session. But most music players – including iPods – aren't yet connected to the internet, meaning such services have limited appeal.
Qtrax has said its users will be able to download songs – making it potentially much more user-friendly, but also more of a headache for the labels, who want to be able to closely monitor what users are listening to.
Qtrax users have to download software to use the service, and are also encouraged to 'dock' their music player with their computer every 30 days so that the service can ascertain which songs have been played.
The service, which uses Digital Rights Management software, is also hampered by the fact that it is not yet compatible with Apple's iPod, the market leader in portable media players. Qtrax has said an iPod-compatible version of its software will be available as soon as April.
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It is indeed changing due to the changes in technology.
The problems are most people feel that they are paying far too much for their music.
why don't the record companies take advantage of technology, If they charged something like 25p per track or £3.00 per album or film they would make mill
Nigel, Leicester, UK
All these free/legal sites are at least trying. I can't see a reason why NOT to support them. Sites like Spiralfrog and Qtrax are trying to pay the artists unlike torrents. Only thing is that Qtrax doesn't work. AT ALL. That's great planning on their part. Until then, just stick to other free/legal sites.
Austin So, Toronto, Canada
I think music should be made legal, providing that the artists are paid in some way. Limewire was good, but ever since people were chased up and charged or taken to court, I think I'll stick with iTunes, or at worst, youtube.
Samm, cHESHIRE,
There are only two types of music user. Those that make it and those that buy it. There is a notion in existence that if the Major music Industry died, there would be no more music. Wrong!
This will not stop musicians making music and audience buying it. Audiences will just need to do more detective work to find what they want. Radio could help music more too by disgarding their gatekept ideals with the majors and favour more independent music productions. Audience will still buy CD's if they cant download. Perhaps musicians should only sell music at gigs or change the way they sell music to at least try to stem the free download model. Whatever happens - music will not die nor the music industry. Its just changing shape - thanks to technology.
Jake Ward, Oxford, UK
Jim Thirsk:
Of course you want the music to be "free", why shouldn't you? But how in hell do you think any musician should be able to survive if the music is "free"? And the argument about band t-shirts is just so utterly stupid it blows my mind. What if I print t-shirts with the exact same print for a lesser price, then the bands don't get anything anyways.
And for gods sake, nobody over 17 years age buys band t-shirts and coffeecups with "cool" band prints, and of the thousands of artists music i've been listening to in my life i've seen probably 3 of them on stage. I'm quite normal in that aspect.
Keep leeching, but you are not able to do it with a good conscience. Just remember that I who are unvoluntarily paying your cultural "freedom" will someday have my say about things.
David Lonnqvist, Stockholm, Sweden
Why do the labels do this all the time- they negotiate with everyone, make positive noises- accept the pre-paid cheques that are a condition of these types of negotiations. And then inevitably pull the plug at the last minute?
They do it because they live in a parallel universe, one in which P2P doesnât exist, or what little there is can be prosecuted out of existence.
âIllegalâ downloads exists to the tune of between 40-100 for every paid for (Nobody knows the exact figures- because by its very nature it is underground). There is now a whole generation that believe that music should be free, that doesnât mean they donât buy concert tickets, band paraphania, or for that matter CDs of their favourite bands, but they also load up their MP3s and iPods straight from the P2P networks.
So if the user isnât going to pay, and the labels still want revenue where do they look? To people who want to talk to the downloaders- and that means advertisers.
Jim, Thirsk, North Yorkshire
There is such a thing as free, you just have to look past your own nose to see it. i have at least 320gig of free things.... music, games, videos... you name it. everything is free, and the funny thing is most of this new stuff is made by younger people, while all the older people sit around tables sueing 8yr old girls! when there are countless millions of people getting absolutly anything media, or pc based for free, and no virus' like the record companys like to make people think.
Your eithter in the know, or not
adam larkin, romford, United kingdom
Don't always blame the record companies â itâs easy to do so. QTrax made the most stupidest error in announcing their service to the world. They managed to do well by raising a lot of money but they got caught up in their own hype.
Its simple business sense to not announce something like this if you havenât tied up the deals. Itâs just bad business and if I was an investor I wouldnât think too highly of them. In fact, if I was one of the record companies, I wouldnât use them now either. Perhaps they should have watched the no-hopers on the âDragonâs Denâ!
I actually downloaded it on my laptop that I rarely use, and there were no songs available but today I read this article. I guess Iâll stick to buying music â thereâs nothing good free in this world â just donât know why people keep believing that there is! Dear oh dear.
Shahid Miah, London, UK
really feel for them. It sounds like they have jumoed the gun on launching, and have been stung by the record compaines for it.... Or was it that they have negotiated these contraacts with the cleaners at the record companies!
James, Birmingham, UK
Digital Restrictions Management
Steve, London, UK
So the download button is working and when you download it and search for songs and the list is populated, go try and download a song and it says "downloads are coming"...YOU CANT DOWNLOAD A SINGLE SONG!!!
THIS IS UNREAL!
Carl, beverly hills, USA, CA
Am I the only one thinking that this is nothing but a scam from the music industry aimed at testing if a service like Qtrax could be profitable? Would the music industry jump in to a thing like this without being certain about not losing a dollar?
I mean come on, 30 million songs; that's about every song ever produced by major companies in the history of music. Would they give it all that away, and perhaps not succeed, and therefore giving moral alibi to all leechers out there, and the material as well?
By moral alibi I mean that they start listening to leechers demand for free music and disregarding the moral issue about who have the right to set the standard of price, quality and the likes, the leechers or the rightful owners of the intellectual property?
But no matter what, Im curious beyond belief to see what has happened when I wake up tomorrow.
David Lonnqvist, Stockholm, Sweden
In the UK a company called Omnifone has already developed unlimited music to its subscribers through its Music Station phone application and they REALLY have deals with all the labels,
Zara Burdett, London, London
I can't wait to have my fair share of low bitrate and poorly encoded tracks from a selection of musical sewage drizzeling from the gutters that are these labels.
Bobby BigKnuckles, Essex,
How did Adverts destroy TV? TV seems to be doing fine. Ad supported radio seems to be doing well also.
jim, anaheim,
Yes, I would think Google would be fair evidence that online advertising is effective in certain contexts.
Jim, Houston, Texas
What a fantastic idea it was. Nokia are doing the same thing in the summer with their "nokia music store" on the grounds that more and more people are are downloading illegally so the music industry is losing out on money. At least this way the music industry is still getting money, more than if things stay the same.
I hope the plan still goes ahead.
Sam, Milton Keynes,
Just about the only way the music industry can hope to survive in this day and age. But you musn't forget that the big companies such as Sony and EMI are not run by very forward thinking people, as the last twenty years has evidenced, so I'm not expecting any major change in the paradigm until they're literally running themselves into the ground. Nice effort on the part of Qtrax, but time will tell I guess.
Nick, Wilmslow, Cheshire
Stupid idea. Adverts will destroy music as they have destroyed TV.
will, harrogate, uk
This situation seems blindingly obvious to the man on the street.
This would pretty much wipe out pirating, and the big record co's are umm-ing & arr-ing?!?
The longer they delay this flexi-licensing, the more money they will loose to pirates.
Do record lables & artists really need so much money??
Perhaps Jacko, Britney, Winehouse etc would be better if they weren't so stinking rich!
Chris, Ipswich, UK
The problem for me is that the record companies expect to be reimbursed by qtrax. Qtrax gets their money from advertising revenues. Companies pay Qtrax money for adverts. But I never never look at adverts. Does internet advertising actually help sales significantly ?
Barrie, Brussel,
It'll bomb out. As if the ads aren't bad enough, DRM to go with it? Which means crappy low quality wma type tunes also. Nobody would waste their time. Kids aren't even that stupid. Take perfectly good music for free, ruin it, and then offer it to others while you sit back and rake in the cash from sponsors? I don't think so. And on top of that, have Qtrax spy on users to report to the RIAA and sell their personal info? If Qtrax can get it off the Internet so can anyone else. No need to go through 3rd, 4th, & 5th parties.
Sal Lee, Tampa, Fl