As part of the deal, Apple will reportedly be more lax on their strict price fix, breaking MP3s into three tiered pricing: Older catalog tracks,79-cents; newer songs, 99-cents; and hit songs, more.
From their website:
"Every time a song you bought sells, you get a cut of the proceeds. Earlier buyers get more, so it pays to be a trendspotter."
Rolling Stone describes it as "stock market-like method to lure people toward its service."
How it works: Popcuts takes in a 10-20 percent cut of each purchase, then leaves it to the artist to decide their own percentage. From there, the rest of the earnings go towards the users’ accounts.
But currently their catalog has only 200 obscure artists and roughly 700 songs.
Why, it's QTRAX, who on their website boast "free and legal music downloads". But, all is not as it seems over at this "authorized" P2P network. Rolling Stone reports that supposed deals between QTrax and the major labels has been "greatly exaggerated."
Nonetheless, QTrax represents the music industry's recognition that ad-supported, free, on-demand downloads are the next wave. The problem, though, is monetization. A distribution model like QTrax is similar to traditional radio: user's get their music for free in exchange for listening to advertisements. But unlike radio, a service like QTrax is on-demand and permanent. The incentive of having your song on the radio -- creating buzz and/or demand for listeners to purchasers to PURCHASE their own copy for later on-demand and permanent enjoyment -- is simply not present.
Perhaps that is why the labels pulled out?
Forbes notes that this is a "sign of the recording industry's growing interest in free, advertising-supported access to music". Yet, Last.fm plans to ultimately offer users a chance to purchase a monthly subscription allowing them to listen to songs as many times as they want.
Rolling Stone notes that the Last.fm deal with major record labels is heating up "the arms race" between Amazon and Apple iTunes.