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 Back in 1978, Peter Gabriel recorded a song called "D.I.Y." But while the free-music startup in which he's invested, We7 Ltd., could make some headway by following its own muse, its partnerships with record labels and distributors will be critical to its success.With that in mind, We7 has negotiated a deal with Warner Music Group Corp. [WMG], making it the second label to sign up for the ad-supported music service, after Sony BMG Music Entertainment inked a deal in March. Also on board are IRIS Distribution, InGrooves.com Inc. and BFM Digital LLC, while majors EMI Group plc and Universal Music Group remain holdouts. Gabriel invested in We7 as part of a $6 million round announced in January, alongside London-based Spark Ventures and Eden Ventures, as well as company founders and management. The company is one of several to offer free, ad-supported music, typically involving short pre-song advertisements. We7 offers a hybrid model, including songs with advertisements that eventually disappear, ad-free songs that can be purchased through the site and on-demand streaming music. Each label has negotiated its own terms; Sony BMG's music can only be streamed, while Warner's can be streamed or acquired via paid downloads in DRM-free form. We7's approach contrasts with popular U.S.-based free-download site SpiralFrog Inc., which takes revenue from ads that consumers watch as they navigate the site and download songs. SpiralFrog users also must check in at the site periodically to keep their files working, and the files can't be transported on iPods or burned to CDs. That service includes music by Universal and EMI, while Warner and Sony BMG are still negotiating; the company has raised $30 million from hedge funds and other institutional investors. Another startup, TrueAnthem Corp., allows free downloads of song files that include pre-song ads delivered by the artists themselves. Backed with $2 million in angel funding, TrueAnthem links artists with brand sponsors that advertise on a widget-based distribution system, and expects to work primarily with unsigned and independent artists rather than major labels. -- Paul Bonanos See Tech Confidential posts about TrueAnthem and SpiralFrog For more see Billboard.biz Comments
From: Paul Bonanos,
Matt, the post above mentions Warner and Sony as major labels providing music on We7. EMI added its songs earlier this month too, so three of the four majors are now on board. There's more than just independent content. I'll check out your suggestion though. Thanks! Paul
Posted on:
September 12, 2008 11:49 AM
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WE7 is quite great, but the problem is that there are only independent artists. I quite prefer http://www.deezer.com/en where you can find both independent artists AND chartbusters! Don't you like Deezer??