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@ Midem: Interview: Steve Purdham, CEO, We7: Adding Up The Audio Ads

IMG_3609Oxford-based We7 – funded by Peter Gabriel – ran contrary to some of the more outlandish claims from ad-funded free music counterparts in Cannes, admitting to starting last June with just 30 tracks – 15 from founders’ mates. The site embeds 10-second audio ads in DRM-free MP3s, though these ads can be removed by redownloading after a month…

Growth: With only indie repertoire, it’s by no means iTunes Store but: “We went live with 30 tracks because that says ‘we’re here’. You need to get an impetus of scale – that’s where we’re at at the moment.” We7 reached its millionth download in December: “We’re actually already close to our second million, so the ramp is going quite well.” The catalogue is 500,000 tracks.

Attitudes: “The independents are very open – they know it’s about distribution. MP3 didn’t frighten them, whereas the majors were not too sure. DRM was a big issue until Christmas – the majors have got their minds around ad-funded streaming but they haven’t got it around ad-funded downloads as yet. The good news is, the discussions I had at last year’s Midem have moved from “no” to “let’s consider it” to “let’s try something”. There’s more openness now that ad-funded models aren’t evil – also, it’s not going to be the resurrection either; it’s just one part of an overall digital future.

Monitoring: With no DRM, We7 has to hope users revisit the site in order to remove embedded ads – only one percent ever do, Purdham said, admitting “people don’t fully understand the mechanism”. But an iTunes download manager plugin is coming soon that will automatically update details: “We’ll download a package of ads. We’ll be able to feed back how many times you’re listening to it and that will allow us to say, it may not be four weeks but if you’ve listened to the ad seven times, that’s enough for the advertiser, we’ll take it off.”

Peter Gabriel’s involvement: “The level of interest is such that he wants to get involved. He and I spent many an hour trying to work out what would be the right name. He understands things really, really well – some of the contributions we are executing but in different timeframes. He has a different way of looking at things. That’s the difference between someone like me, who’s an executer and builder, and somebody like him, who’s a creative. He’s involved on a regular basis.” Airport fog and a broken leg had hampered Gabriel’s arrival at Midem, however.

Advertising: Pitching audio ads to musicians a hard sell? “It can be; some people have an aversion to advertising but commercial radio has been doing this forever – you don’t know that you’re going to get a Kellogg’s Corn Flakes add just ahead of your music. There’s not a correlation between the ad and the track.” The model: “You’ve got to try and avoid the run-of-the-mill deliveries. If you want to sell 50 million impressions at £0.05-per-thousand, then the model won’t work, so we have to work with brands directly, with advertisers and media planners to start getting on to their radars.”