Can a Firm Profit From Free Tunes?
Amid a seemingly endless slide in music sales, the industry is constantly casting about for new ways to make money from its product. The latest experiment: Give it away online, and enlist advertisers to cover costs. The fate of a new company — Rcrd Lbl (pronounced: Record Label) — will be a test case. A joint venture of Downtown Records, the independent label behind Gnarls Barkley and others, and Peter Rojas, a journalist and entrepreneur who founded the respected technology blogs Gizmodo and Engadget, Rcrd Lbl is a hybrid record label and blog; its releases are to be posted on the company’s Web site for downloading, free and unrestricted by digital-rights management software that limits copying. The company has signed up three sponsors so far: Richard Branson’s Virgin America Inc. airline, Nikon Corp., and PPR SA’s Puma AG sneaker unit. The site will also include short articles, social-networking features and Internet radio stations.
