Qtrax Licenses Sony BMG, Bolsters Ad-Supported Model

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Ad-supported upstart Qtrax has now signed another major licensing deal, this time with Sony BMG.

According to terms disclosed on Monday, the partnership will allow Qtrax customers to play Sony BMG songs a limited number of times within a protected, advertising-supported environment.  “We are pleased to announce that we have completed this agreement with Qtrax, and look forward to working with them as part of our ongoing campaign to build new opportunities for our artists within the digital marketplace,” said Thomas Hesse, president of Global Digital Business & US Sales at Sony BMG.  Qtrax, owned by Brilliant Technologies, plans the release of a controlled P2P application, one that authorizes DRM-protected downloads free-of-charge.  Other specifics were not outlined, though consumers will be required to interact with advertising in some fashion in exchange for the freebie.

The Sony BMG agreement adds to a long list of licensing deals for Qtrax, including those involving Universal Music Publishing, Sony/ATV, Warner Music Group, The Orchard, EMI Music Publishing and EMI Music, TVT Records, Go Digital, ASCAP, and BMI.  That is a strong group, though a number of major recording and publishing gaps remain.  The missing pieces have forced Qtrax to peg a September release date, part of a drawn-out pre-launch dance for the ad-supported entrant.  The waiting game means delayed revenues, though licensing agreements with major recording and publishing groups are costly in other ways as well.  According to numerous sources, SpiralFrog was forced to pay multi-million dollar sums to secure the blessing of Universal Music Group, and other major labels have been known to demand similar upfront payments.  For Qtrax, that means early cash burn and a risky bet, though advocates point to a concept that combines two explosive elements: free music downloading and internet-based advertising.