The widespread illegal downloading of music and the subsequent decline in CD sales have forced the music industry to explore new business models. Advertisers may well hold the key to allowing consumers to listen for free whilst ensuring the rights owners and artists get paid.
Advertising has long funded the broadcasting and print industries, and it is becoming an increasingly attractive alternative for the music industry. Major record labels Universal, Sony BMG, Warner Music Group and EMI have all signed deals to allow their extensive catalogs to be freely streamed or downloaded for a slice of advertising revenue.
Independent and unsigned artists are also being catered for. Web portal Ubetoo, for example, is allowing artists to upload their own material, or material they own the rights to, to its site, where it can be accessed for free by its global audience. Ubetoo splits advertising revenues 50-50 with the artists.
Anna-Clara Blixt Modin, CEO and founder of Ubetoo, says the site provides a platform for artists to market themselves, share their music and videos and make some money. “Illegal downloading and copying is a problem. Ubetoo provides a way for artists to get their music heard and get paid,” she says.
Artist keeps all rights to the material
Officially launched on October 16, 2008, the site already has more than 4000 uploads and has attracted musicians from the US, Scandinavia, Germany and the UK. Material is streamed rather than downloaded to protect the artists’ interests. “The idea is that the artist keeps all rights to the material, ensuring better conditions for his or her artistic future,” Blixt Modin says.
Each time a song or video is played by a new user, the artist earns a portion of the advertising revenue. These earnings can be compared to the royalties that an artist is entitled to when signed by a record label.
With the music industry’s backing, a number of free and legal music sites, such as Imeem, Qtrax, SpiralFrog and We7, are also providing ad-supported streaming or downloadable music. Social-networking giant MySpace has also brought major labels on board for its recently revamped MySpace Music, offering users free music streaming, as well as selling MP3 downloads.
Tailor adverts to specific user groups
The interactive nature of these free-music sites make them extremely attractive to advertisers. Advertising has become an acceptable part of the internet landscape and the advantage for advertisers over traditional print media is that there is greater scope for matching campaigns to target audiences.
Ubetoo has been running a Sony Ericsson advertisement featuring Swedish hip-hop artist Lazee and a competition to win a W980 phone. Users with a Swedish IP address that go to the site and choose a hip-hop or R‘n’B song are exposed to the interactive advertisement.
“Advertisers are willing to pay more when they can tailor adverts to specific user groups based on where they live or their musical tastes,” Blixt Modin says. “You are also able to accurately measure the advert’s performance: how often it is seen and by whom.
“Not only is it a win-win situation for the artist and the advertiser, but the user gets to listen for free as well.”
Roger Tilzey
