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22:30 5th May 2010
Despite music streaming service we7 announcing a landmark month for their turnover, an online music expert has reiterated his doubts that there is a "solid, profitable business model in the ad-funded element" of the sector.
Late last month, we7 said that, for the first time ever, all of the on-demand music listened to by its users was funded completely by the advertising appearing on the site.
The service now claims that it is the first group in the sector to be able to boast a workable business model while reasonably compensating artists for their work.
Paul Brindley, managing director of Music Ally, described the "encouraging" news as "a chink of light in the ad-funded market", adding, however, that it would still be a "challenge" for similar sites to become profitable.
According to Mr Brindley, recruiting paid subscribers is still the most probable source of income for the group. "The rights owners, certainly, are still pretty insistent on wanting to see more users convert to become paid-for subscribers," he explained.
Posted by Derek Olman
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