SONG CONTEST BLOG

MusicWeek reported that ad-supported music service and download store, We7, which Peter Gabriel co-founded, is rolling out a new monetization model whereby its users get rewarded with points for their session time which can be redeemed for ad-free days of music.  In addition, an ad-free subscription service will be offered as the portal’s premium tier.  The news comes just shy of SpiralFrog’s announcement last month that it will be shutting down.  SpiralFrog, a competing ad-supported music service, was unable to sustain its business model.

SpiralFrog, the highly profiled ad-supported download service, has shut its doors after a lukewarm reception in the UK and endless content licensing and upper management strife in the US prior.  The company was the first to deploy a ‘feels-like-free’ music download service in 2006 and secured both Universal and EMI, with competitors Qtrax and We7 following suit with similar ad-supported download services, before spiraling to its demise.

Ad-supported music service, Qtrax, hopes to differentiate itself by offering downloads previously only available as bootlegs.  This move may position the company atop of 25 million tracks under this category alone, assuming that that copyright clearance hurdles can be overcome.  In the mean time, Peter Gabriel’s competing ad-supported music service, We7, has announced a partnership with NME.com.  The strategy is geared toward increasing the value of advertising real estate by diverting traffic to the popular British indie music zine which is likely to improve the combined user time spent online and, resultantly, drive more ad revenue.  The two music services have been in the works for some time now and have faced great difficulty in both securing all the major catalogues and financing their operations through advertising alone, a model that will meet further challenges during the present economic downturn when advertisers are being particularly frugal.