If Apple can't persuade all four majors to license their catalogs for DRM-free paid-for downloads, and even Amazon, seen as the company most likely to rescue the music industry away from the grip of Apple, is only able to do so on a trial basis (with regards to Universal and Sony BMG at least), then what chance does Qtrax have with an almost completely new and unproven model.

To put this into even greater perspective, both SpiralFrog (see last100's review) and We7, two services that have offered ad-supported music downloads for significantly longer, are only able to offer a catalog of around half a million tracks each of a million and a half million tracks, respectively. Why? Because the labels are far from convinced that advertising dollars can ever replace revenue from paid-for downloads or CD sales.

In a followup post today, last100 scored an exclusive interesting Q&A with We7 CEO Steve Purdham. UK-based We7, backed by Peter Gabriel, enables users to download free MP3s that have a short (and targeted) audio advert embedded at the start of each track. The ads then auto-expire after four weeks of listening, allowing users to re-download the same tracks ad-free.

Purdham talks on a range of issues including the company's mission, DRM, resistance by the major labels, new business models and We7's competitors.

On the major labels reluctance to embrace ad-supported music downloads, Purdham says the reason is "simple:"

"They are worried that if they leave the iTunes model, the revenues they get will be diminished. So out of 79p they get, say, 46p and they are worried that ad [supported models] will net a lot less. However, there is a realization that in a world where for every track sold by iTunes... 10 tracks are downloaded illegally with no payment, so the real track revenue is 4.6p. Ad funded models need to show they are additive on the whole or scale to make the total cash available higher than before."

And asked whether Qtrax's service is too good to be true, Purdham comments:

"Well let's just say the reports seem to suggest so, which is a shame as I want to see more ad models appear and then the winners are the ones that execute well. The strange situation with Qtrax, and Spiralfrog last year, do nothing for the cause. There are many big questions that are hanging over Qtrax which needn't have been there but I hope they don't destroy the opportunity for the rest of us."

You can read the rest of the interview over at last100, and don't forget to subscribe to the RSS feed to get the latest digital lifestyle news and analysis.

According to a recent study by Jupiter Research, for each song sold, 100 more were stolen. The study also reported that 94% of online music consumers were unwilling to pay for music. The record labels finally got the hint: the Napster Generation thinks music should be free, and they will find a way to get it for free, despite laws or lawsuits. When the record companies realized all their attempts to make up for lost revenue from CD sales had failed, they knew that they now had no alternative but to offer free music to the online masses.

Enter Qtrax

The Qtrax catalog currently boasts 5,000,000 songs, but has plans to eventually offer over 25 million. This makes Qtrax poised to become the most complete online catalog of no-cost legal downloads anywhere in the world. The site, which will launch in Cannes, France with support from stars like James Blunt and LL Cool J is being heralded as the "death knell for CDs" as well as "a massive challenge to iTunes."

The Good

• Songbird-Like Player: Qtrax users download the Qtrax Player, a program built upon the popular Songbird platform. The player functions as the search engine and player for the tunes but it also provides access to a website filled with artist content, including videos, ringtones, lyrics, album art, and up-to-the-minute artist news.
• You Can Upload Your Music: Qtrax says that its users can upload their own music, including songs bought on iTunes or other services.
• May Include "Grey" Music: Since the service will let users upload their own collections, it's possible that Qtrax will allow the tunes like live recordings or demos. Although details are fuzzy on this, if these rare gems were included, Qtrax would have another big selling point.
• Artists are Compensated: Qtrax works with record labels and publishers, licensing their content for distribution online. when you download and play music, the support of advertisers allows Qtrax to compensate artists for their work, something that doesn't happen when you use illegal P2P networks.
• Safe & Free: They is no cost to download the software, there are no hidden charges, no membership fees, and no per song costs. There's also no adware, spyware, or spoofing.

The Bad

• Songbird-Like Player: It may be cool, but it's also mandatory to use the player. Since the player is where the service displays the ads, you must use it, no getting around it.
• DRM: Despite the recent wave of DRM-free music, Qtrax songs will be wrapped in DRM.
• No Beatles here, either: Some music is still  not cleared by labels for digital distribution, so even though this has industry support, you're not going to find those missing tunes here.
• PC-Only (for now): And by PC, they mean Vista and XP only. The Mac version won't be out until March 18th.
  

The Worst

• QTrax songs can't be played on iPods. They say this may change at a later date, but until then, this will kill the service's potential in a big way.

What it Means

What's most important about Qtrax's launch is the changed mentality of the record labels' vision for the online music marketplace. Having them realize that they must offer free music in order to compete with industry behemoths like iTunes, is a promising step in the right direction.

And free music doesn't have to be the disaster labels have always thought. Says Qtrax chief Allan Klepfisz, "the idea of free music is not so radical. Commercial radio and free-to-air television is paid for by advertisers and available for free to consumers."

Exactly.