2008, The Year of Free?

Some time ago I made a rather brave statement that 2007 was going to be the year of free. Was I right? Well, no, not quite. Spiral Frog tried to bounce away into the race only to find its webbed feet nailed firmly to the starting block by tortuous licence negotiations. The delayed US and Canada launches finally happened in September but a European launch remains elusive. The combined effects of delayed launches and big label advances unsurprisingly left the colourful amphibian with spiraling losses. Meanwhile QTraxx quietly ticked along in the background building up to its October release but similarly hamstrung was unable to meet the launch date.

But there is a lot of positive activity:

• Spiral Frog’s September launch.
• Pandora and Ruckuss both continue to build
• Last.FM was bought by CBS in may for a whopping $280 million, has deals in place with Warner and SonyBMG and has gone from strength to strength.
• The ever entrepreneurial Peter Gabriel invested in UK start up WE7
• As of Wednesday MOG signed a deal with Rhapsody making music available throughout the network, with 25 songs a week for free and a subscription fee for fully integrated unlimited access
• But perhaps the least heralded yet most significant development is Imeem. The social network music service has just signed a deal with Universal for streaming its catalogue across the service, which means that Imeem now has deals with all of the majors. The service enables people to upload tracks, create and share playlists and stream music audio and video. In short it enables users to immerse themselves in music as part of their social networking behaviour. But most importantly, as with Last.FM and MOG, it is trying to do something different with the web and music rather than try to re-invent the offline world online.

So maybe 2007 wasn’t quite the year of free, but the activity of the last quarter indicate that 2008 might just be. Why the flurry of activity? Well, as I’ve said a few times over the last couple of months, the music industry is at a cross roads. Sales are declining more strongly than ever and digital isn’t living up to expectations. So be prepared for more ‘out of the box’ deals in 2008 like Imeem and like Nokia’s ‘Comes With Music’.

So is there a future for iTunes? Of course there is, it’s a crucial element of music distribution and will remain so as long as iPod sales remain strong. But what download stores don’t do is appeal to young consumers in the way that illegal file sharing does. Nor have they yet broken oout of niche beginnings. That’s why the labels are looking at new ways to push digital onto the next level.

Exciting times are coming…at last….