Qtrax makes MIDEM splash, but there's a little problem

Service has no deals with big labels

Denver — Qtrax, the free music-download service that launched Monday, apparently isn't as ready for primetime as it claims. The company said it had licensing agreements with all four major record labels, when in fact it has none.

Qtrax officials briefed reporters on the service last week in preparation for its launch, claiming that the ad-supported, "legal" peer-to-peer service had a catalog of as many as 30 million tracks from the four major labels and many independents. It then officially unveiled the service at the annual MIDEM music conference in Cannes — complete with a host of celebrities including James Blunt and LL Cool J.

But Qtrax could go down as one of the most bungled launches in the history of digital music.

The first denial came late Sunday from Warner Music Group and appeared to force the startup to backtrack on its earlier claims of having deals with the majors. WMG said the service definitely was not authorized to distribute its catalog, as no licensing deals have been signed.

"We are in discussions with Warner Music Group to ensure that the service is licensed, and we hope to reach an agreement shortly," New York-based Qtrax said late Sunday.

On Monday, a Sony BMG spokesman said, "Sony BMG can confirm it has not signed a deal with Qtrax for the ad-supported service."

A source said that while EMI Music Group's song publishing unit has an agreement with Qtrax, its recorded music arm, EMI Music, does not. A source from Universal Music Group said the company expects to finalize the deal "within the next few weeks."

Qtrax — which has been in the works for more than four years — at one time did have licensing deals in place with Warner, EMI and Sony BMG, but the deals either expired or were for a different iteration of the service than what went live.

Sources at the labels still negotiating licensing deals with the service are scratching their heads trying to figure out exactly what Qtrax was thinking but declined comment on whether the development will harm those negotiations. However, Qtrax's credibility, particularly among the digital and tech press, has taken a serious blow.

The inconsistency with its music licensing status is just one of several missteps Qtrax has made. The company's news release and briefings with reporters all pointed to the "live" launch of the service. But on Monday, its Web site showed that it is only a beta launch, something the company didn't mention in its buildup.

Additionally, there are several important details about the service that Qtrax officials have failed to make public. For instance, the service does place some limitations on music downloaded from it, but the company has not outlined what those are. It also said it would launch in several countries — in keeping with its "global" moniker — but wouldn't say exactly where.

The company clearly wanted to make a big splash at MIDEM, regardless of whether it had all the necessary details lined up. But it's likely that most consumers — the ultimate target of the Qtrax press campaign — aren't familiar with the global music confab. Now, the company's premature news splash at the conference, without the service ready to back it, risks alienating music fans who might flock to its service to find that it's less than advertised.

The move also has left some asking why Qtrax put so much stock in a MIDEM launch. While the conference is certainly the center of the global music industry this week, a Qtrax launch would have made news on any random Tuesday, perhaps more given the glut of other MIDEM-related announcements with which it is competing for attention.

Antony Bruno is a contributor to Billboard. Reuters contributed to this report.