EMI Steps Out Front With Ad Supported P2P QTrax

EMI has become the first major music company to make its catalog of recordings available to the first advertising-supported legal peer-to-peer music distribution service.  The service, called Qtrax is launching later this year and will provide fans with free, advertising-funded access to high-quality digital music files, as well as the option to subscribe to a premium version of the service or to purchase music tracks and albums on an a la carte basis.

Qtrax will offer two tiers of service:  the first is a free, advertising-supported tier designed to work with and filter copyrighted content from existing peer-to-peer networks.  The second tier is a premium subscription service which will require a monthly fee.  The two-tiered business model is intended to attract a broad base of consumers to try out the service, and then graduate those consumers to purchase music permanently or subscribe.             

In the ad-supported, free tier, users will be able to search the network for specific tracks, and those tracks registered with Qtrax will be made available for download in Qtrax’s proprietary “.mpq” file format.  Users will then be able to play the downloaded .mpq file in full-fidelity sound quality for a pre-defined number of times.  Each time a consumer plays a track, the Qtrax player will also offer fans click-to-buy purchase options, as well as the opportunity to upgrade to a premium subscription service for a flat monthly fee.

The premium subscription service tier uses Microsoft’s Janus DRM technology, which allows consumers to pay a monthly fee for unlimited access to music in the Qtrax network.  Subscribers will also have the ability to transfer content to Windows Media enabled portable devices for as long as the subscription stays active.

The service will also include consumer-friendly community-building and music discovery tools which enable fans to easily access to a vast selection of music and other content, all while generating revenues for artists and content owners.

According to David Munns, Chairman and CEO of EMI Music North America,  “Of course, we think that any ad-supported model should be offered in a way that maintains, or even enhances the value of music, and we believe Qtrax does that by offering a good consumer experience and significant up-selling opportunities.The Qtrax service will also ensure that our artists are compensated for their works and that the value of their music and integrity of our content is protected.”

In addition, Qtrax will offer incentive programs that will allow fans to accrue points redeemable for additional plays for tracks acquired through the free service, or for discounts off a la carte purchases or subscription fees.      

“Qtrax is an innovative approach to creating a legitimate P2P offering, so we are pleased that EMI has agreed to be the first of the major music companies to participate.  In addition to offering a great consumer experience which we believe will get more consumers excited about digital music, Qtrax will ensure that artists are getting paid when their songs are accesses in a P2P environment.  In addition, EMI and other music companies will share in Internet advertising revenues, which according to the Interactive Advertising Bureau and PricewaterhouseCoopers reached a new record of $3.9 billion for the first quarter of 2006 in the US – a 38 percent increase over Q1 2005,” said Allan Klepfisz, President & CEO of Brilliant Technologies Corporation, parent company of LTDnetwork.