Universal Music Backs Ad-Supported Download Service

30 August 2006

NEW YORK: Universal Music, a unit of French-owned Vivendi Universal, is backing a new advertising supported download service which lets consumers access music for free and will challenge the dominance of Apple Computers' hugely successful but paid-for iTunes.

The start-up company, SpiralFrog, launches its service in December and is headed by Robin Kent, former boss of the Universal McCann media agency.

Kent has talked with labels Warner, EMI and Sony-BMG about making their music available and hopes they will be lured to participate by the surge in online advertising.

He says his research has revealed that young consumers will accept ads as long as the brands and products are relevant to them. To this end clothing brands Levi's and Benetton have expressed interest and US fashion label Perry Ellis has already signed up.

Adds Kent: "Offering young consumers an easy-to-use alternative to pirated music sites will be compelling."

A report released last month by the International Federation of Phonographic Industries revealed there were still 40 illegal downloads for every legal one.

Although iTunes has 80% of the market for legally downloaded music, competition is expected to become fiercer as the holiday season approaches.

The IFPI has predicted that 60 million music players will be sold worldwide this, many of them not compatible with Apple's services.

Data sourced from Financial Times online; additional content by WARC staff