Policy —

Qtrax’s free, legal P2P scheme is vaporware for now

100% free, all-you-can eat P2P sounds like a dream too good to be true. For …

Last night we told you about Qtrax, a new P2P service aimed at combating illicit P2P by offering a legit service that compensates artists and labels via enforced advertising. In that story we briefly noted that Qtrax didn't appear to have all of its ducks in a row: the company was saying that it had signed all four major music labels, when it appeared that they hadn't. At the time it was rather unclear, however, because Qtrax told both Reuters and Wired that it had the necessary signatures.

When midnight came and went last night without an official launch, it became clear that there were indeed problems. For its part, Qtrax now says that it is in negotiations with all of the labels, but that admission came only after it was discovered that Qtrax had somewhat misrepresented itself.

Late last night the LA Times called around to confirm the deal and found that only Universal would say that it was close to a deal. EMI and Warner denied a deal was in place, and Peter Kafka says that Sony BMG has also denied that there was a deal in place. In short, no labels have signed on yet.

All of this points to signs of trouble for Qtrax, whose business model changed sometime last year from being an ad-supported way to encourage users to pay for music, to being an ad-supported way to deliver totally free music. Originally, Qtrax's DRM would have only given users so many ad-supported plays before a song would need to be purchased (think Zune sharing). We can only speculate, but the move to providing totally free downloadable music without ticking timebombs likely gave the labels pause.

If Qtrax could pull it off, it'd be quite a coup. Getting the Big Four labels to agree that any music downloaded from the Gnutella P2P network is legit if it's wrapped in DRM for the purposes of pushing ads would mark quite a change. It would, in effect, legitimize P2P for the labels, who would begin making money directly off of P2P activity. Given the current climate about ISP filtering, bandwidth caps, and the like, perhaps this idea is trying to gain traction at the wrong time.

Ken Fisher
Ken is the founder & Editor-in-Chief of Ars Technica. A veteran of the IT industry and a scholar of antiquity, Ken studies the emergence of intellectual property regimes and their effects on culture and innovation. Emailken@arstechnica.com//Twitter@kenfisher