Music biz balks at ad-funded downloads

The market may be there, but doubts remain over whether the terms on offer can persuade enough established recording companies to enter it seriously.

Although SpiralFrog had signed up EMI and Universal before its launch plans were canceled, it had failed to win deals with the other two majors, Warner Music Group Inc. and Sony BMG Music Entertainment — a joint venture of Sony Corp. and Bertelsmann AG.

Thomas Gewecke, Sony BMG's executive vice president for digital sales, rejected suggestions that hardened file-sharers could be tempted only by free offerings. "They don't expect their Xbox to be free," he said. "They don't expect the ringtone on their cell phone to be free."

Although signed up to SpiralFrog, EMI still harbors reservations about ad-supported download and subscription sites. Roger Faxon, who heads the publishing division, said the company was ready to experiment with such services — but only "if we can understand the economic model and how our songwriters will be appropriately compensated."

EMI is negotiating to sell its music on video-sharing site YouTube.com and popular online hangout MySpace.com, Faxon said, declining to elaborate. "I tend to believe it's these models that will capture the public's imagination, rather than the straight download models."

Free music has always had a place in the industry, other observers point out, and recording companies should not try to deny it a new role in the digital age.

"Radio sells music for free," French economist Jacques Attali said during a Midem meeting. "But radio is doing very well with advertising and other kinds of revenues."

Black Eyed Peas frontman will.i.am — in Cannes with the band's female vocalist, Fergie, for a joint appearance at France's NRJ Music Awards — gave his own take on the industry's troubles.

"To be honest I'm afraid of the music industry falling apart," said will.i.am, whose real name is William Adams. "The thing that makes me nervous is the hesitation that record companies have about the new technologies."

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