Universal: Watch Ads, Get Free Music

By Ed Oswald, BetaNews

August 29, 2006, 12:30 PM

Music label Universal has taken steps to allow consumers to listen to its artists legally for free by signing an agreement with new music store entrant SpiralFrog. The service, which plans to launch later this year, would allow users to download songs for free in exchange for viewing or acting upon advertising shown to that user.

The label's catalog includes popular artists such as U2, Gwen Stefani and the Roots. The agreement would cover SpiralFrog's planned services in both the US and Canada. The Web-based service uses digital rights management technology to protect the audio and video content from being shared.

In preparing to launch SpiralFrog, the company's executives surveyed users to gauge whether or not they would be willing to sit through advertising in order to download free music. The results showed that consumers were open to such a platform as long as it was non-intrusive, relevant and targeted.

"Offering young consumers an easy-to-use alternative to pirated music sites will be compelling," said Robin Kent, the company's CEO said in a statement. "SpiralFrog will offer those consumers a better experience and environment than they can get from any pirate site."

The company plans to target the 13-to-34 age segment in its advertising. Revenue raised from advertisers would not only be used to pay for content which users download, but also would be split with the record labels with which SpiralFrog partners under the company's business model.

Advertisers say such a business model allows them to reach their customers through mediums they know their customers use on a regular basis.

"Our audience is heavily into music and can be more easily reached on the web," Vice-Chairman, President and COO at Perry Ellis Oscar Feldenkreis said. "We see SpiralFrog as an ideal place for us to communicate and build lasting relationships with our core audience and which give us unique new revenue opportunities."