• by Gavin O'Malley  @mp_gavin, April 24, 2007

Qtrax, a free and legal peer-to-peer music service, has partnered with Sony BMG Music Entertainment to carry the label's full catalog of recordings. The deal brings Qtrax, which is slated to launch in September, a step closer to success in an arena where many companies have already failed.

Qtrax was established over four years ago as an illegal file sharing network based in Melbourne, Australia. Now, along with several companies in the space, Qtrax is aiming to turn peer-to-peer networks into a legitimate business with the cooperation of music labels and advertisers.

Owned by holding company Brilliant Technologies, Qtrax has already attracted a stable of top labels, including Universal Music Publishing, Sony/ATV, EMI Music Publishing, EMI Music, and BMI, among others.

Through the new agreement, users of Qtrax will be able to access songs from the Sony BMG catalog for a predefined number of times. Each time a consumer plays a track, the Qtrax player will also offer fans click-to-buy purchase options.

Either through advertising or music sales, Qtrax's backers just want the service to be successful.

"Some see it as trailblazing the ad-supported model and allowing the possibility that in the future music downloading will be paid for, in part or in whole, by advertisers," said Allan Klepfisz, president and CEO of Brilliant Technologies. "Others see it as an effective means of encouraging consumers to sample and subsequently purchase music."

In an odd twist, the company handling ad sales for Qtrax, Rebel Digital, is run by the former CEO and chief sales and marketing office of SpiralFrog -- a company that made waves last year by signing top labels like Universal Music and BMI to its free music service, but has since hemorrhaged nearly its entire management team.

Robin Kent and Lance Ford, former SpiralFrog CEO and chief sales and marketing officer, just started Rebel Digital, and Qtrax is their first major partnership.

Despite their involvement with SpiralFrog, however, the two wax optimistic about the market for free and ad-supported music sharing.

"We chose the music sector as this is one that is desirable to both a young target audience and advertisers alike," said Kent. "We know advertisers and the music community have a strong desire to partner and we believe we can help facilitate this."

"This synergy will guarantee success on a massive scale that could forever change the tenets of how free music is monetized on the Internet," added Ford.

Rebel Digital will sell advertising, develop marketing plans, help drive incremental traffic and provide technical solutions for web-based music sites like Qtrax seeking to monetize their content.

And Qtrax and Rebel aren't the only companies pursuing ad-supported peer-to-peer file sharing. A three-year-old company named Intent MediaWorks also recently began embedding pop-ups in music and video files. Intent, which claims 60% of its users put up with pop-up ads, expects its users will download some 10 million digital media files by the end of the year.