A ground-breaking move to launch a new free global music download service that could help overcome the music industry's cash crisis faced uncertainty Tuesday.
QTRAX, a website offering free legal downloads supported by ads, was launched amid fanfare Sunday at MIDEM, the music world's biggest trade get-together, where record industry leaders are desperately seeking how to overcome revenue falls caused by a slide in CD sales and rampant piracy.
But barely 24 hours after the promise of free legal peer-to-peer (P2P) music, New-York based QTRAX hit a false note when industry sources said the company had failed to secure licensing agreements with all big four music majors: EMI, Universal, Warner and Sony BMG.
We are finalising agreements with the major record labels here at MIDEM, a QTRAX executive Richard Schineller, told AFP, adding that the company would issue a statement shortly.
We chose MIDEM to launch so that we could do it with the full awareness of the key players in the music industry, he emphasised.
But both EMI Music and Universal told AFP that while talks were underway with QTRAX, nothing had been signed.
EMI Music is in talks with QTRAX but as of today does not have any licensing agreements yet, said a London company executive who declined to be named.
Universal Music Group likewise confirmed no deal was in place. Talks with the new free download service are underway but there isn't a done deal yet in place, a Universal executive said.
In a statement released late Monday, QTRAX responded that since the service had been launched, it had registered 61,000 users-per-hour, a potential 1.5 million users-per-day.
The response to the service is clearly unprecedented. We launched at MIDEM, the leading music industry conference, precisely because of the degree of support we have had and continue to enjoy from rights holders, said QTRAX President and CEO Allan Klepfisz.
We believe the exact nature of that support will be publicly clarified within a very short time. As the world's first free and legal P2P service that has chosen to spend 4-5 years on licensing and not to violate international property rights, we have decided that we will provide activation keys shortly upon final execution of all pertinent contracts, Klepfisz added.
If QTRAX promises hold true, new ad-supported music services could prove a boon to the global recording industry, struggling to find ways of turning bits into bucks in a digital world that has ushered in massive illegal downloads and a deepening slump in CD sales.
This crisis in the music world has had major fallout for the industry heavyweights.
EMI recently announced sweeping staff cutbacks. On top of that, it is also facing walk-outs by some of its biggest stars including Paul McCartney and Robbie Williams, who believe the company has failed to respond to the rise of the new digital music world.