Insiders talk free music at MidemNet


CANNES -- Free music and how to profit from it was the hot topic during the weekend as interested parties from all sides of the music industry gathered here for the annual MidemNet forum.

While Hollywood continues to grapple with the effects of new technologies, the music industry is trying desperately to harness revenue from a runaway beast that has long since left the barn.

"Music in the digital world has lost its value; it's everything around the music that has become important," Ted Cohen, managing partner of TAG Strategic, said during one panel session. "Music is not being devalued; it's being revalued."

To that end, making a splash Sunday was the launch of a new outfit called Qtrax, which claims to be the first free and legal peer-to-peer music service. Going online at midnight EST Sunday in the U.S., Canada and seven other countries including the U.K. and France, the platform boasts as many as 30 million copyrighted tracks from major and independent labels. It is a subsidiary of New York-based technology holding company Brilliant Technologies.

Qtrax president and CEO Allan Klepfisz said at a packed news conference that he had been working for five years toward making the announcement.

"It's the world's biggest jukebox that offers free and legal music of high quality and eliminates viruses," Klepfisz said. "We want to bring free music into the legal environment."

Promising a content-rich environment with extensive artist biographies, reviews and other materials, he said, "Qtrax is a fully integrated, seamless experience." The ad-supported service uses the Firefox browser and will provide portability by Feb. 29, Mac compatibility by March 18 and have an iPod solution by April 15, Klepfisz said.

He said the biggest hurdle in getting Qtrax off the ground was obtaining rights clearances from both majors and indies, but it now has endorsements from Sony BMG Music Entertainment, Universal Music Publishing, Warner Music Group and EMI Music Publishing, as well as the collection societies ASCAP and BMI.

Asked if the application would in the future work for films and television, Klepfisz said: "We do in time intend getting into that, but we would want to make sure people aren't exposed to anything unpalatable. Advertisers don't want to have to worry about anything distasteful."

The announcement topped a weekend in which the issue of free music was on everyone's mind. Many said they believe that subscription-based or advertiser-based business models are the answer.

"If you give away music for free, the people who write music are not going to write," promoter Harvey Goldsmith said in an earlier session. "The major rights owners must start talking to each other to create a platform so an artist who's also a writer can make some money. I believe that 90% of the people who support music understand that there's no such thing as a free lunch."

Lawrence Lessig, whose company Creative Commons offers people a way to license their work free of charge for noncommercial use, cautioned that punishing young people for utilizing the new technologies was not good for anyone.

"There is no way to kill the technology or the use of it. You can only criminalize it and drive it underground," Lessig said in a well-received presentation. "We can't make our kids passive; we only make them pirates. In the United States, kids live in an age of prohibition, and what they do is against the law. It is corrosive and corrupting of the idea of the rule of law, of respect for the law and of democracy and copyright."

Thomas Hesse, president of global digital business and U.S. sales for Sony BMG, said in one session that bundling access to music was "the next frontier" and held great promise for revenue. "Bundling music, whether with a device or cell phone or cable access, means it becomes something you can consume in a very free way. There are some very interesting models, and in all the testing we do, consumers respond very favorably."

Legendary record producer Bob Ezrin, who is now chairman of Live Nations Recordings, reminded attendees: "Music is not content; music is art. The music is not the problem; the business is the problem."

Ezrin blamed the industry's loss of focus on the drive for profits. "I don't think technology made us lazy," he said. "I think you can blame quarterly reports and being in the business of making the numbers."