Panel: Ad-Supported Music is the Future

Sprint_Music.jpgAt the Piper Jaffray Global Internet Summit 2008 in Laguna Beach, California, online music executives discussed the mobile music revolution and agreed that an “ad-supported free music model makes the most sense”—but the biggest challenge for distribution channels has been to make money, MediaPost reports.

“The average CPM for MySpace is $1 or less—that’s a tenth of a penny per track per stream,” said David Hyman, CEO and founder of MOG, a Berkeley, Calif. music-blogging platform. “They’re shooting too high, getting a piece of a very small pie vs. bringing the pricing down to the point where lots of companies can jump in.”

Hyman said in the report that “music labels are likely making money on less than 1% of all online music that gets downloaded or streamed because many young people who typically want the music cannot afford to purchase it.” Bringing the prices down or offering ad-supported free services would generate more business for the labels, he said. There’s too much good stuff for one post here, so check it out.