CBS' Makes Music Free, Ad-Supported

Looking to bring free music back to consumers, CBS has launched an advertising-supported online music site as a followup to its $280 million purchase of in May 2007., the music and social networking site, will now allow users to listen to complete songs or albums by artists on every major U.S. record label, with the ability to search for specific artists and songs. Users can stream songs or albums a maximum of three times. Previously, only allowed users to listen to 30-second song bites.

CBS did not announce any advertisers as part of the announcement, but executives say the newly revamped site will be valuable for advertisers, as the site will grab users' preferences over time. Such growth will enable marketers to target specific listeners.

In sprucing up the site, the company has revenue-sharing deals with all major labels--Universal Music Group, Sony/BMG, Warner and EMI--as well as various independent labels. The sharing also extends to artists. CBS/ executives said the revenue sharing is based on each time a song or album is played.



Although the site has been greatly expanded, some analysts believe it functions more as a promotional site for the labels, especially with upping how often a song or album is played. executives refer to its site as a "jukebox."'s ability to allow online users to listen to free music walks a tightrope, since it has marketing deals with iTunes and Amazon, which also attempts to persuade users to purchase songs or albums.

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