qtrax We all know people like free music and this was proven a few days ago when Last.fm launched their free on-demand streaming music service (with limits, of course).  They saw a HUGE spike in listeners, page views, and unique visitors shortly after it launched.  Knowing how much people love free music, it is then easy to understand why there has been so much hype surrounding a new start-up called Qtrax.  Qtrax uses the words “free” and “music” quite a bit on their site to describe “the worlds first, 100% legal and free Peer-2-Peer music application.” They were set to launch last night at midnight and early reports were praising the service to no end, especially since they said they had all 4 major record labels on board and more than 25 million songs to choose from.  All of the praises started to come to an end once people found out the real details…

As it turns out, the worlds first 100% legal and free Peer-2-Peer music application with all 4 majors on board actually doesn’t have all four on board. In fact, at this point, there are 0 major labels participating.  Webware says both Warner and Universal are in fact negotiating with Qtrax but that nothing was ironed out. Then BMG chimed in and said that they hadn’t set anything in-stone while EMI said there was no final agreement. At this point they haven’t launched the download yet and it could be another 24 hours before it is available. Another downside aside from the obvious is that when it does launch, songs will not be playable on the iPod or Mac Computers (yet).

Compensating artists would work as follows: Because users are required to use a special application, when you download and play the music, Qtrax can keep track. Money earned from the ads that you’d see in the application are then divvied out to the artists which you listen to for their work.

If Qtrax is actually able to get the four major record labels on board, this could be huge. But until they do, Qtrax is just another start-up with a lot of funding (30 million thus far).