• by Wendy Davis , Staff Writer @wendyndavis, January 28, 2008

A new ad-supported online music service, Qtrax, boasting 25 million tracks from all four of the major record labels, announced this weekend that it was launching.

As it turns out, however, the company's splashy pronouncement, made at the Midem music conference in Cannes, was overly optimistic. Instead of debuting with all of the major labels on board, the company didn't have deals with any of them, according to the blog Silicon Alley Insider.

Qtrax exec Robin Kent, the former CEO of Universal McCann Worldwide, confessed to Silicon Alley Insider that the company didn't have solid deals in place. Instead, Qtrax reportedly had "the blessing" of all four major labels.

Had it launched, the service would have been quite a coup, offering consumers completely free music, albeit with Windows Media's digital rights management restrictions. (Among other features, those restrictions would have made it difficult for most people to transfer the music to Apple's iPods; Qtrax claimed it was going to unveil a system to make its tracks compatible with iPods.)

Now, a company Kent was previously involved with, SpiralFrog, has made more progress towards launching ad-supported music than Qtrax. Last week, SpiralFrog announced it had drawn more than 400,000 members since launching in September. SpiralFrog only offers tracks from one major label, Universal Music Group, but that's still one more than Qtrax, as of this morning.

Despite the Qtrax debacle, the major record labels are becoming more innovative in their distribution strategies. Just last week, CBS' Last.fm launched its own free music service with all of the major labels; Last.fm only allows users to listen to songs online while directing people who want to purchase tracks to paid sites like iTunes or Amazon.com. The major labels have also taken steps towards selling music online in MP3 format, so people can more easily download it to iPods.

Whether the record companies will ultimately experiment with Qtrax remains in doubt. But if the company was hoping its premature announcement would result in the quick finalization of deals, the tactic appears to have backfired hugely.