CANNES, France - After years of fighting the Wild West of freely downloaded music, the mainstream music industry welcomed a former desperado to their annual schmoozefest Monday, highlighting the difficulty of their search for a solution to plunging CD sales.

And that solution might be: give music away legally and find another way — such as advertising — to make money.

Participation was down at the annual MIDEM music business conference at the seaside resort of Cannes, reflecting the failure of digital music sales to make up for crumbling revenues and the billions of dollars being lost to music piracy — illegal downloads outnumber the number of tracks sold by a factor of 20 to 1 according to industry body IFPI.

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Yet the theater was packed when Janus Friis — co-founder of Kazaa, the music-sharing service once reviled by record levels — addressed participants.

Friis, who was presented as an Internet entrepreneur and a grandfather of digital music distribution, gave his backing to the latest venture making a lot of noise at MIDEM: Qtrax, which shows both the interest in making giveaways pay — and the difficulty of putting the deals together.

A revamped online ad-supported file-sharing service, Qtrax promises to offer unlimited, free music downloads. It was launched amid a blizzard of publicity in Cannes, including champagne, snazzy slogans and invite-only concerts from celebrities including James Blunt and LL Cool J.

After lunch with Qtrax CEO Allan Klepfisz on Saturday, Friis said he would have liked to create "an advertising supported service" for Kazaa — if only the record labels had given their blessing.

"We were trying to do the same things," he told delegates.

"But we couldn't do it. The timing was just like, so off."

Yet even as record labels start embracing new technologies — Sony BMG Music Entertainment became the last major music label to start selling music online without copy protection this month — Qtrax showed Cannes the birthing process can be extremely difficult.

The Web site service had not even gone live when Warner Music Group Corp. issued a statement denying Qtrax's claims it had given the service permission to give away its music.

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Two other major recording companies, Universal Music Group and EMI Group PLC, later confirmed they did not have licensing deals in place with Qtrax, noting discussions were still ongoing.

A call to Sony BMG Music Entertainment was not immediately returned. Thomas Hesse, president of global digital business and U.S. sales at the label, is quoted by Qtrax as saying "we have completed this agreement with Qtrax."

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