The announcement of a new website suggests that the music industry is finally getting the message: people want free music. John Collins reports
It's always wise to be a bit wary of anything that's offered free online. Bitter experience has taught most Net users that just as in the real world there's no such thing as a free lunch. If it comes with no up-front costs you can be sure you are paying for it some other way. And online that can often mean viruses, trojans or other malicious software that can infect and damage your computer.
So this week's announcement of a new service called SpiralFrog (www.spiralfrog.com) offering free music downloads in exchange for viewing advertisements seemed too good to be true for many observers.
Based in New York, SpiralFrog has teamed up with Universal Music, the world's largest record company, to offer free downloads of its artists such as U2, Eminem and Elton John.
The company is also reported to be in negotiations with the other three major record labels - SonyBMG, EMI and Warner Music - and numerous independents.
The service will launch in the US and Canada before the end of the year and a spokesperson confirmed it is looking at a simultaneous launch in the UK and Ireland early next year. Users will have to wait 90 seconds for each song to begin downloading and during that time they will have advertising placed on their computer screen. SpiralFrog will share the revenue from that advertising with Universal and its artists.
Downloading music online has become hugely popular ever since Napster was launched in 1999 allowing music fans to easily share their collections with other users over the internet.
SpiralFrog executives claim that 70 per cent of people aged 16 to 24 regularly download music. Laptops and digital music players such as Apple's market-leading iPod have become the new stereos for the download generation. But, worryingly for the music industry, the move to digital formats such as CD and the ubiquity of high-speed internet access makes it extremely easy to share that music without having to purchase it. The use of MP3 and other digital file formats also means the digital songs are much smaller in size than the raw audio files on a CD.
Despite the best efforts of the music industry to tackle illegal file-sharing services in the courts and to provide legitimate ways to buy music online, for every legal download, another 40 tracks are shared without the permission of the copyright holder. SpiralFrog is hoping entice music fans not to download illegally by giving them music for free in a legitimate setting. Special software embedded in the songs will make it difficult to copy them or share them with others.
SpiralFrog won't just provide free downloads - it bills itself as a "destination" - but will also offer music news, videos and lots of other extras that will require users to share their personal details. The company will then use that information to display extremely targeted advertising to users, based on information such as their location, interests or income.
It's a model that has worked extremely well for Google, which has managed to become the giant of the internet on the back of advertising revenue. It offers all its services, from search engine to e-mail, blogging tools to calendar software, for free. In exchange it gathers a huge amount of data about web users, which allows it to target relevant adverts at them which have a much higher conversion rate than traditional internet advertising.
It's no surprise then that SpiralFrog's management team is made up of former executives from some of the top US and European ad agencies. Its chief operations officer, Eric McClean, is an Irishman - which probably explains why Ireland will be one of its first markets in Europe.
THE IRISH RECORDED Music Association (Irma), the local representative body for the recording industry, welcomed the news that SpiralFrog was coming to Ireland. Its director-general, Dick Doyle, said it was a new way for internet users to acquire music legitimately, alongside the subscription and pay-per-song models already in use.
Not surpisingly, given its name, SpiralFrog is targeting the youth market, which these days advertising executives categorise as anyone under the age of 35.
"Offering young consumers an easy-to-use alternative to pirated music sites will be compelling," said Robin Kent, SpiralFrog's chief executive officer. "SpiralFrog will offer those consumers a better experience and environment than they can get from any pirate site."
Executives in the recording industry are not the only ones who are struggling with the impact of the internet on their traditional business models. With its mission to make the world's information searchable, Google has its eyes on the publishing industry. Controversially, it has teamed up with a number of leading universities and begun scanning the contents of their libraries. Publishers and authors have not welcomed the move and have questioned whether it is a breach of copyright.
This week Google went a step further by allowing books that are out of copyright to be downloaded and printed, not just read online.
Meanwhile, the music industry continues to adopt what Doyle calls "a carrot and stick approach" to tackle online piracy. The carrot is its involvement in various awareness-raising activities such as contributing to the Department of Education's internet advisory programme for primary schools. The stick is a series of legal actions against users of the illegal services.
Despite receiving large amounts of publicity, Irma's legal action against a number of so-called "serial uploaders" of copyrighted material last year seems to have had relatively little impact. The International Federation of the Phonographic Industries (IFPI) estimates that worldwide a staggering 20 billion songs were downloaded illegally in 2005, which suggests that there is a massive appetite for free music.
PARENTS AND EMPLOYERS, who in many of the cases that Irma pursued were providing the PCs and broadband connections used for file-sharing, and were thus liable for any legal action, may have become aware of the issue, but free-for-all downloading continues unabated.
Advertising-supported services would seem to be a case of "if you can't beat them, join them" for the music industry.
"We have always admitted that we will never get everyone into the fold," says Doyle. "You will never kill piracy totally - all you can do is try and keep it under control. You have to have legitimate services in place for those who want to download legally." The problem for the industry is the ease with which music can be copied from a CD into a digital format that can then be shared on the internet.
Last year, Sony ran into a public relations nightmare when it secretly installed technology on some of its music CDs that prevented them being copied to a PC. The issue was that it used a piece of technology called a root kit, favoured by computer hackers as a way of taking control of someone else's PC, and which left Sony's customers' PCs exposed. The resulting outrage online forced the company into an embarrassing climbdown.
Although it has played down the suggestion, SpiralFrog is clearly targeting Apple's iTunes service, which accounts for 80 per cent of all music downloaded legally. Music industry executives are known to be uncomfortable with Apple's business model of selling all tracks at 99c and only supporting its own iPod player. "The industry as a whole would prefer a common platform," says Doyle. "We'd like to make it easy for people to switch platforms."