A distributor of Internet file-swapping software abruptly postponed the launch of its free online music service until it can finalize music...

Share story

CANNES, France — A distributor of Internet file-swapping software abruptly postponed the launch of its free online music service until it can finalize music licensing deals — a detail the company omitted when it threw a star-studded coming-out party over the weekend.

Qtrax’s ambitious, ad-supported music service promised unlimited, advertising-supported music downloads with the blessing of the major recording companies. That claim began to unravel just hours before Qtrax’s scheduled debut Monday when Warner Music Group issued a statement that it had not authorized the firm to distribute its artists’ music. Other major record labels soon followed.

In a statement, Qtrax President and Chief Executive Allan Klepfisz said the launch of the service would be put off “for a short time.” He also maintained that the service had the support of “rightsholders.”

“We believe the exact nature of that support will be publicly clarified within a very short time,” Klepfisz added.

The recording industry has begun embracing such alternative business models amid a multiyear decline in album sales in CDs and other physical formats. Online sales have jumped dramatically in recent years with the rise of Apple’s iTunes Store and the ubiquitous iPod portable music players, but they haven’t offset music-industry losses.

Qtrax set out to legitimize the experience of downloading music for free from other music fans’ computers via online file-swapping networks like Gnutella by using advertising revenue to compensate record companies.

Qtrax said it would distribute the codes required to use all of the music service’s features once it obtained all the music licenses.