The James Kilgour BlogA Life Blog.

Qtrax, the fledgling free music download service has finally announced its intention on launching… this time for real. I’ve written about the company previously, regarding it’s many failed launches and missed deadlines. However, this seems like the real deal.

I’m excited.

Yesterday, I listened in on an online press conference with the CEO Allan Klepfisz.  I also posed my questions on the upcoming world launch to him. The first country to launch will be Australia/New Zealand on November 5th, with a new Asian-Pacific country launching every Thursday until Christmas. According to Klepfisz, the decision to launch in  this region first is down to the high illegal download rates; over 95% of music downloads are illegal. I asked Klepfisz regarding his US and UK/European launch plans; he responded that the US would be live in Q1 next year, and the UK by February. He also noted that Qtrax had music licenses for 77 Countries worldwide; more than any other global music service. Notably, Japan has not been included in this, although India  and other majors will be.

Klepfisz also announced a partner deal with Baidu search; China’s largest online search engine, with a 70% market share. From the Chinese launch (17th Dec), visitors to Baidu’s Entertainment Portal and Qian Qian Music Online software will be redirected to Qtrax artist pages; thus providing huge numbers of traffic. Klepfisz highlighted that Qtrax would work with other local partners in other territories to gain similar deals, as well as viral marketing to gain users. The motives behind this deal seem to be China’s tightening up on Copyright Laws. Klepfisz predicts that this will further aid Qtrax in gaining users and thus revenue. Baidu is notorious for linking to millions of illegal music downloads, something that has been a major source of criticism and investigation from the copyright bodies.

Obviously revenue in an important issue to Qtrax. Spiral Frog was another free download service that failed to gain revenue, and collapsed several months ago. Klepfisz revealed that the company had managed to acquire sufficient funding, and hopes to raise a further $50 million through their financial partners in China. Lance Ford, Chief Marketing Officer highlighted their plans to utilise ads for revenue; he “forecasts good advertiser pickup” with “high quality revenue from day 1”. Both Ford and Klepfisz believe that they will “hit the ground running” through a mixture of network ads and premium ads from blue chip advertisers; they noted that the two types of ads will integrate seamlessly into the Qtrax software to engage users, not repel them. 

I was also interested in how Qtrax is different from other services, such as the massively successful Spotify. Klepfisz responded that Qtrax would use Local Music to attract visitors. Other global services are very western, and do not utilise regional music. He highlighted that only 15% of music sales in China were for Western Artists. He also pointed out that Qtrax is a download site, and not just another Spotify. He did however preach his like for the Streaming Service, but also mentioned that Qtrax is “the ultimate step”. Furthermore, he identified that Qtrax will be easy to use with Social Networking features built around Music (as opposed to Facebook/MySpace etc, which uses music as an add-on).

Next, Klepfisz talked on the ability of Qtrax to attract users from illegal services, such as BitTorrent. His argument was that Qtrax will provide a superior user experience; a highspeed browser with “10 second downloads”, a good quality site and a full music catalogue. Another feature shows was the link in with other sites; Qtrax will link artist pages to sites such as TicketMaster and Amazon, providing users with the ability to buy merchandise and concert tickets from within the software; something that will also serve as an additional revenue stream. Next Klepfisz mentioned that Qtrax will have more than just downloads like a BitTorrent site; ie. Artist Information (nothing groundbreaking).

A final point I asked the Australian CEO was about DRM and Portability. Unfortunately Qtrax will use the system to track music usage. In addition, music will only be playable within the Qtrax player, (in order to keep users within the environment). A good piece of news on this subject was however that Portability would be available up to two weeks after each territory launch. Unfortunately, iPods won’t be supported at immediately, however Klepfisz promised that Qtrax will investigate possible deals with Apple on the issue. He promised that an iPhone App was in the pipeline. 

It’s great to hear that Qtrax may finally be coming. The service has been several years in the making, and has always been hope that free, legal music would happen. My only concern now is on uptake. If the company can do a ‘Spotify’ and capture the youth market, then may have a hope. A large user base would be the necessary bargaining chip for the company to survive and ultimately succeed in a notoriously tough industry. After all,  that’s Show Business.    

JK