Ad Supported P2P Networks

    July 13, 2007

Close to three-quarters of U.S. Internet users are open to viewing ads in exchange for free downloads, according to the Intent MediaWorks "P2P Usage Survey" from May 2007.

More than six in 10 respondents said they had used a P2P network to receive free downloads.

Andy Cooper of INTENT said, "More than 80 million US Internet users search and download files from P2P networks each month, 10 million or more at any one time."

"When consumers find the files they are looking for, they share files with friends through P2P, personal blog posts, adding the files to their social networking pages, or send them via e-mail, text or IM," Mr. Cooper added. "If advertisers sponsor that content, their programs can reach consumers across multiple Internet channels from one source."

The idea that music can be free, even if supported by ads, is met by controversy. Prince recently was criticized for giving away copies of his newest CD in copies of the UK Mail on Sunday, although he was paid by The Mail for the copies.

Companies like SpiralFrog and Qtrax are attracting users with the word "free." They have been receiving licenses from labels to create music destinations that are free to users and supported by ads.

Allen Klepfisz of Qtrax points out that an ad-supported model reflects current consumer behavior. "If you have a whole generation that believes it’s their birthright to have free music, you need to monetize it," he said. "There are now about three billion transactions a month in P2P, mostly illegal. The closest your business model is to current consumer behavior, the better its chance of success."