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18 mars 2008

Is We7 the future of the music industry?

With an ever increasing number of people downloading their music for free, albeit often illegally, over the web, the music industry is at a critical juncture: adapt or die.

We7 is a music download website that hopes to set the tone for the music industry in the 21st century. It thinks it has found a way to make music available for free and yet still generate revenue for record companies and artists.

People want to be able to access and use music in an ever greater number of ways, while artists and record companies want to ensure that they get paid when people use their product. It is now accepted that DRM is too restrictive and impractical to manage, so a new way is needed.

Steve Purdham, CEO of We7, thinks his company has the answer. Speaking exclusively to, he said: ‘We are in a new digital economy but the music industry is still stuck in its old ways. When I got involved in We7 a year ago it was much worse.’

We7 was founded less than a year ago, when Purdham was exploring an investment in music download company OD2. He found himself in a room with VC John Taysom (who’s idea We7 originally was) and musician Peter Gabriel, who had founded OD2 back in 1999.

They explored the idea and decided to run with it. If they have any respect for tradition, they will still have the fag packet, beer mat or serviette they first scribbled their ideas down on.

Their timing would appear to be perfect as there has been a stream of announcements from the great and the good of the music industry since then that things have got to change.

What brought We7 to’s attention was the announcement last Monday that Sony BMG, one of the four major record companies, will be making its catalogue available through We7 from the end of April, although only for streaming at first. That and the fact that Peter Gabriel is involved.

‘The turning point was last Christmas, when the majors realised that DRM was dead,' said Purdham. ‘Most tracks aren’t DRM protected anyway, with CDs and BitTorrent-type downloads being the source of the majority of music.’

t's all about choice

So if you can’t make people pay for music, how do you make money out of it? 'It’s all about choice,' says Purdham. 'Our philosophy is: come to the site, listen to the track and then decide how you want to pay for it.

'We have an ad-funded alternative, which allows us to target advertising at our users, who have to register in order to access our services. This ability to target is very valuable to advertisers. We can also dynamically graft audio ads to the start of the music file, which stay with you when you download it.'

Of course, wasn’t about to just take Purdham’s word for it so we created an account and downloaded BB King’s Woke Up This Morning. On playing the MP3, we had to sit through a ten second audio ad for Altec Lansing speakers and then it was straight on to BB. We have to report that we were unable to make the streaming function work, but it’s unclear where the fault lies for that.

'After four weeks of ownership we give people the ability to remove the ad from the MP3, but the key commercial factor is how useful the metrics on our registered users are to advertisers,' explained Purdham.

Things seem to be taking off for We7. It had a million downloads in the last six months of 2007 and topped a million in the first six weeks of this year. Maybe the music industry has finally realised that the way to make money out of content is to offer it free and sell advertising on the back of it. It’s crazy but it might just work.

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