A penny-stock company called Brilliant Technologies Corporation made several business-news desks look silly recently when they credulously reported an announcement by its Qtrax unit that it had signed a deal with all four major-label record companies to give consumers all the music they wanted—free—through an advertising-supported format.
Great story, if true. Except it wasn’t.
Major news outlets, including The Financial Times, the International Herald Tribune, The Associated Press, and Reuters, as well as some folks who should really know better—Wired and The Register—bit hard on the press-release bait, giving Qtrax millions of dollars in free, unwarranted, advertising.
The problem: Within hours, every major label issued statements saying they had no such agreements with Qtrax—and it turns out that, in fact, there were none.
The story broke wide on January 27, when a number of news outlets were handed a press release, which New York-based Qtrax planned to release the following day at the MIDEM music-business conference, which said:
Showcasing an innovative ad-supported downloading model that easily directs revenue back to artists and rights holders, QTRAX is the first free P2P service to be fully embraced by the music industry. With a base catalog estimated at between 25 and 30 million copyrighted tracks from all the major labels, publishers and a host of leading indies, QTRAX has the largest legal library of any music service on the market.
Here’s the FT:
The latest white knight to ride to the rescue of the struggling recorded music industry hove into view on Sunday with the launch of a legal downloading service called Qtrax
But unlike previous models, including Spiral Frog, which is still running, Qtrax has done licensing deals with all leading record labels as well as a host of independents. It claims to have a catalogue of more than 25m tracks, which would make it four times the size of Apple’s iTunes website.
Allan Klepfiscz, Qtrax chief executive, said: “If you want to entice people from illegal sites, you have to have a comparable offer. Nobody will leave 25m files on Limewire [the largest illegal peer-to-peer site] to go to 1m [on Spiral Frog] or even five or six million [on iTunes].”
The International Herald Tribune’s headline, “Mainstream music industry realizes the value of ‘free,’” sums up its story:
The latest Web site to join the ad-supported free-music bandwagon, Qtrax, had a coming-out party Sunday complete with rap stars and invitation-only concerts. Hyping itself as “the world’s first free and legal peer-to-peer music service,” Qtrax blanketed the start of the music market with posters, free flash drives and snappy slogans.
Qtrax says it is opening its virtual doors Monday with all of the major record labels signed on, adding that it has a selection of 25 million tracks. But that total comes from an estimate of all the tracks available on LimeWire and other peer-to-peer networks, not just commercial and licensed releases from the record companies, and so may not represent actual customer choice.
Industry observers had other questions about the Qtrax approach, which despite five years of spade work was still missing a few details at its opening. But Qtrax says it offers a version of “free” that is better than the pirated-music networks: It will come without the computer viruses, spyware and other technical obstacles that peer-to-peer music networks are known for, and it will incorporate elements of social networks and fan sites.
Well, okay. If Qtrax says so, I guess the IHT thinks it’s fine to print it.
The record-label denials sparked bitter, second-day stories about Qtrax getting ahead of itself, flat-out lying, or even being part of a stock scam. Most outlets wrote follow-up stories reporting the news, but few placed actual corrections on their original stories. Neither the FT nor the IHT has corrected its story, and the uncorrected version continued to proliferate on overseas news Web sites.
Wired appears to have rewritten its original post at least a day later, without updating the timestamp to reflect the change (though the headline does say “Updated”).