Whats The Deal At Qtrax?

For those of you who have not yet heard of Qtrax, it is an upcoming peer-to-peer (P2P) music service, aiming to offer free high-quality music from major labels in exchange for being served advertising while utilizing the Qtrax website and service. Think of the free model in use at SpiralFrog for an idea. In fact, some former SpiralFrog executives have signed on to perform consulting for Qtrax.

Despite seeming to be a completely legit service however, there is apparently a misunderstanding as to whether Qtrax has received the official backing of the four major music labels. UK-based Times Onlines has reported that "it emerged that none of the four major labels had done deals with the site, putting a large dent in the promised catalogue of 25 million songs and prompting allegations that the site's founders had misled fans."

Since the beta download of this promising service has just launched (as of Jan. 29, Midnight EST), I decided to take a look around the official site to see what claims the service has made. It turns out that on the Press page, there is a post dating back to April of 2007 (see image below) claiming that Qtrax had achieved an agreement with Sony BMG, though the news is questionable since there is no link provided to a news article or press release of any kind.

Apparently, the four major labels (EMI, Sony BMG, Warner and Universal) have all confirmed that agreements had not been reached with Qtrax, though both Warner and Universal stated negotiations with the site were underway. This then led Qtrax executives to not only mention that "they would not have launched the service if they had not secured the backing of the industry," but to also acknowledge that the "ink hadn't dried" and deals were not yet finalized.

With $30 million in VC funding I hardly believe that Qtrax is a fraudulent company with bad intentions, but on the other hand, the founders seem to be rushing a launch that does not appear to be ready to take place. I may be mistaken, but shouldn't these guys wait until all agreements with the suppliers of content are finalized and written in ink before launching. It is possible that any of the four deals could fall through at the last minute if the labels don't feel adequately compensated, which can be hard when you are trying to give away their product for free.

Whatever the case though, the public beta for Windows has become available as planned (with a Mac OS X version set to come in March), so we will have to stay tuned and see what becomes of this "free and legal" P2P music service.