Major Labels Finally Arrive To The Peer-To-Peer Party

The peer-to-peer service QTrax, which calls itself “the world’s first licensed Gnutella client,” will launch in October, according to a story in today’s New York Post. QTrax will have songs from all four major labels in its catalog, and there are high hopes for the service; there’s a catch, though, and according to an April piece in the New York Times it’s that the downloaded songs are locked down by copy protection. After a certain number of plays, users will be directed to buy the tracks, which no doubt helped make the service more attractive to the majors:

With a full complement of songs from the major labels as well as the esoteric live recordings and personal tracks stemming from users’ own collections, Klepfisz estimates Qtrax will have access to between 20 million and 30 million copyrighted songs at launch in October.

At that size the service could not only be considered a legitimate threat to Apple’s iTunes, which only features 5 million songs, but also a better economic proposition as well (record labels collect about 70 cents on each iTunes sale).

That Qtrax has the support of the four major record labels – EMI, SonyBMG, Universal Music Group and Warner Music Group – and all of their respective publishing divisions underscores the industry’s increasing realization that peer-to-peer services can’t be sued out of existence and instead should be embraced as a potentially lucrative new source of revenue.

We have a lot of questions about QTrax, and they go beyond “Will this thing take off?” (It’s too early to tell on that, but we aren’t 100% optimistic; after all, a file-sharing application needs actual filesharers to be successful.) Here were a few:

• The phrase “full complement of songs from major labels” stuck out to us–will the entire catalogs of these labels be available on the service, or will the majors first experiment with catalog material and slightly older music as a way to get their feet wet? • How will, say, the DRM-free offerings that EMI is engaging in right now compete with the QTrax versions of the songs, which will be protected upon first download as a way to encourage purchase–wouldn’t it be easier for users to just go to another store that sells restriction-free versions of the tracks? • These songs from users that go beyond the major-label offerings–how will the service be able to figure out which ones are spoof-tagged major-label tracks, a mainstay of all peer-to-peer services? And what about those live versions of songs, particularly from bands that don’t take kindly to soundboard recordings? • The files–which are allegedly in a format called “MPQ”–aren’t all going to be Windows Media, right? If that’s the case, seriously, you can just bin this thing right away.

FILE-$HARING [NYP] Earlier: Music Industry Remains Unclear On “File-Sharing” Concept