Qtrax puts legal face on P2P

But forgets to sign for the recordings...


Midem UpdatedSo when the going gets weird, the weird get ad-funded. Even in the short, strange history of digital music, they don't come weirder than Qtrax, a music service that launched here at Midem in Cannes today. It's a marriage of two desperate industries – the music business, and the ad-supported web startup. To steal a phrase from Sun's Scott McNealy, it's like watching two garbage trucks colliding.

So how weird is this?

Qtrax delivers an unlimited supply of free music to the web surfer, for them to keep, by scraping the Gnutella P2P network, sticking ads on the front end, filtering out the bogus files (that the IFPI and RIAA have put on the P2P networks in such abundance over the years), and wrapping the song files in DRM.

If that isn't surreal enough, the company pushed a bewildered looking James Blunt on stage with a broom to say how stealing from the sweat shop was wrong. And that he didn't really know much about what was going on – but he'd like to.

Qtrax is staffed by refugees from SpiralFrog, the clueless ad-supported web startup that was unveiled in a blaze of publicity but never quite launched properly – yet still managed to fork over $2m to Universal Music, the world's biggest record company, before it had made a single transaction. This is their latest suicidal tilt at the market.

If you're going to fail, I guess, then fail hard and fast.

QTrax massive poster advertisement in Cannes

Qtrax updates its massive Midem poster. Perhaps it needs to work on signing some record companies.

The company has pinched what it could from open source land. The fat client is a custom version of Firefox, with a fork of the Songbird music player layered on top. Normally software developers could expect a decent license fee from a $30m start-up for use of their work - but in the new Tim 2.0'Reilly "freetard" model, the Firefox and Songbird developers don't get a cent for their labour - merely the satisfaction that they're "building a platform".

The company also deploys MusicIP's filtering software to weed out noise (such as the junk tracks that contain pops and clicks) as well as unlicensed material such as The Beatles catalog.

Qtrax has plastered Cannes with saturation advertising. And it's won glowing plaudits from the visiting mainstream press.

The Times is enthusiastic: "After a decade fighting to stop illegal file-sharing, the music industry will give fans today what they have always wanted: an unlimited supply of free and legal songs," it writes. A credulous Wired report repeated the company's claim that the service offered 25m songs, whereas that's the theoretical size of the publishing catalog Qtrax has licensed. If there are only five songs on the Gnutella network that get past Qtrax filtering at any one time – then five songs is all you can get.

Reg readers will be able to spot the flaws in the plan, summarized for us by Dan Cryan of research firm Screen Digest:

"Free on its own is not enough," he told us. "It's an ad-funded model built around download an application, and that's a barrier to entry in itself."

The DRM ensures that music fans won't be able to take the music to go: it's tied to the host computer and the DRM collects play information to be beamed back to the mothership. The reporting isn't a deal breaker, but the incompatibility may well be. Qtrax said it's working on cracking Apple's FairPlay to allow iPod users to take the music and go.

Anyone who'd had to build an ad-supported business knows the pitfalls - if you don't have massive scale, you're competing with "a billion unwanted voices in real-time", as one reader memorably described Web 2.0. Jupiter's Mark Mulligan estimates that 100 clickthroughs are needed to generate rights holders enough to compensate them for the equivalent of one legal download through iTunes.

With a recession coming and bound to hit new entrants the hardest, we would advise Qtrax to burn through their VC money as fast as they possibly can. ®

Update

At its press conference, Qtrax claimed to have licenses with all four major record labels: Universal, Warner, Sony and EMI. Except they don't. Universal, Warner and EMI say no deals are in place, while an unconfirmed rumour we've heard says the Sony deal doesn't cover a download service. We can't confirm the figure for VC investment in Qtrax, so we've cut that from the original version of this story.


Other stories you might like

  • Lonestar plans to put datacenters in the Moon's lava tubes
    How? Founder tells The Register 'Robots… lots of robots'

    Imagine a future where racks of computer servers hum quietly in darkness below the surface of the Moon.

    Here is where some of the most important data is stored, to be left untouched for as long as can be. The idea sounds like something from science-fiction, but one startup that recently emerged from stealth is trying to turn it into a reality. Lonestar Data Holdings has a unique mission unlike any other cloud provider: to build datacenters on the Moon backing up the world's data.

    "It's inconceivable to me that we are keeping our most precious assets, our knowledge and our data, on Earth, where we're setting off bombs and burning things," Christopher Stott, founder and CEO of Lonestar, told The Register. "We need to put our assets in place off our planet, where we can keep it safe."

    Continue reading
  • Conti: Russian-backed rulers of Costa Rican hacktocracy?
    Also, Chinese IT admin jailed for deleting database, and the NSA promises no more backdoors

    In brief The notorious Russian-aligned Conti ransomware gang has upped the ante in its attack against Costa Rica, threatening to overthrow the government if it doesn't pay a $20 million ransom. 

    Costa Rican president Rodrigo Chaves said that the country is effectively at war with the gang, who in April infiltrated the government's computer systems, gaining a foothold in 27 agencies at various government levels. The US State Department has offered a $15 million reward leading to the capture of Conti's leaders, who it said have made more than $150 million from 1,000+ victims.

    Conti claimed this week that it has insiders in the Costa Rican government, the AP reported, warning that "We are determined to overthrow the government by means of a cyber attack, we have already shown you all the strength and power, you have introduced an emergency." 

    Continue reading
  • China-linked Twisted Panda caught spying on Russian defense R&D
    Because Beijing isn't above covert ops to accomplish its five-year goals

    Chinese cyberspies targeted two Russian defense institutes and possibly another research facility in Belarus, according to Check Point Research.

    The new campaign, dubbed Twisted Panda, is part of a larger, state-sponsored espionage operation that has been ongoing for several months, if not nearly a year, according to the security shop.

    In a technical analysis, the researchers detail the various malicious stages and payloads of the campaign that used sanctions-related phishing emails to attack Russian entities, which are part of the state-owned defense conglomerate Rostec Corporation.

    Continue reading
  • FTC signals crackdown on ed-tech harvesting kid's data
    Trade watchdog, and President, reminds that COPPA can ban ya

    The US Federal Trade Commission on Thursday said it intends to take action against educational technology companies that unlawfully collect data from children using online educational services.

    In a policy statement, the agency said, "Children should not have to needlessly hand over their data and forfeit their privacy in order to do their schoolwork or participate in remote learning, especially given the wide and increasing adoption of ed tech tools."

    The agency says it will scrutinize educational service providers to ensure that they are meeting their legal obligations under COPPA, the Children's Online Privacy Protection Act.

    Continue reading
  • Mysterious firm seeks to buy majority stake in Arm China
    Chinese joint venture's ousted CEO tries to hang on - who will get control?

    The saga surrounding Arm's joint venture in China just took another intriguing turn: a mysterious firm named Lotcap Group claims it has signed a letter of intent to buy a 51 percent stake in Arm China from existing investors in the country.

    In a Chinese-language press release posted Wednesday, Lotcap said it has formed a subsidiary, Lotcap Fund, to buy a majority stake in the joint venture. However, reporting by one newspaper suggested that the investment firm still needs the approval of one significant investor to gain 51 percent control of Arm China.

    The development comes a couple of weeks after Arm China said that its former CEO, Allen Wu, was refusing once again to step down from his position, despite the company's board voting in late April to replace Wu with two co-chief executives. SoftBank Group, which owns 49 percent of the Chinese venture, has been trying to unentangle Arm China from Wu as the Japanese tech investment giant plans for an initial public offering of the British parent company.

    Continue reading
  • SmartNICs power the cloud, are enterprise datacenters next?
    High pricing, lack of software make smartNICs a tough sell, despite offload potential

    SmartNICs have the potential to accelerate enterprise workloads, but don't expect to see them bring hyperscale-class efficiency to most datacenters anytime soon, ZK Research's Zeus Kerravala told The Register.

    SmartNICs are widely deployed in cloud and hyperscale datacenters as a means to offload input/output (I/O) intensive network, security, and storage operations from the CPU, freeing it up to run revenue generating tenant workloads. Some more advanced chips even offload the hypervisor to further separate the infrastructure management layer from the rest of the server.

    Despite relative success in the cloud and a flurry of innovation from the still-limited vendor SmartNIC ecosystem, including Mellanox (Nvidia), Intel, Marvell, and Xilinx (AMD), Kerravala argues that the use cases for enterprise datacenters are unlikely to resemble those of the major hyperscalers, at least in the near term.

    Continue reading

Biting the hand that feeds IT © 1998–2022