Digital Payment CEO Doesn't Like MySpace's Rumored Free Music Plan

Rumor has it that MySpace will soon join imeem and Last.fm in offering free, ad-supported music from all four major labels, in exchange for revenue split somewhat along the lines of what the site already does with Sony/BMG music videos.

One would imagine that the CEO of the company that processes micropayments for MySpace’s SnoCap-created MyStores would resist such a plan, and one would be right.  Leslie Poole, CEO of Javien Digital Payment Solutions, issued the following statement to Listening Post explaining why he thinks MySpace should combine a free model with its existing pay-per-song model, rather than going 100 percent free and ad-supported.

The crux of his argument is that once people get out of their teen/post-teen stage, they’d rather pay for music than deal with ads.  Check out what he has to say, then say whether you agree with him in our poll:

Just because the advertising-supported business modelhas worked for some of the industries that have made the move into thee-content space, like newspapers, for example, doesn’t mean that itwill necessarily work for the music industry.

As a top e-commerce solution provider for online and mobile musicsellers, we work in close connection with companies who want toleverage the most effective business model to sell their music online. From our experience, it does not seem that an ad-based model alone isstrong enough to support music e-commerce, let alone to revamp theindustry.

There are a couple of reasons why the ad-based model is unlikely towork for the music industry, but the main explanation is that thetarget music industry audience ­ post-college, financially independent, tech-savvy, 24 to 35 year olds ­ are more likely to pay a minimal feefor music delivered in an easily manageable format than to listen tomusic with front-ended advertisements.

Ad-based models typically allow listeners to access the music onspecific sites but don¹t allow them to convert, save or download themusic. The average on-the-go consumer wants to put it on their iPod, have it in their stereo, and play it in settings where they may nothave Internet access ­ without a download option and combined with theadditional annoyance of short advertising clips, listeners are going toturn to other music providers, even if it isn’t free.

The rumored MySpace ad-based site is an interesting idea in theory, but in order to draw in enough unique visitors to make it worthwhilefor the record companies, I think ultimately a combined ad-based andpriced model will be more successful. Allowing users to listen on thesite with ads and also providing the option to download for a fee willcombine the best features of both options. The bottom line is thatwhile free music is nice, people want music when, and how, they wantit, and ad-based models can’t provide that experience."

What do you think?  Do you agree with Poole, or do you think a free, ad-supported MySpace music service with songs from all the major labelswould be a hit?