Universal Backs Free Music Rival to iTunes

[JackSpratts]

By Joshua Chaffin and Aline van Duyn in New York

Universal Music, the world's largest music company, has agreed to back a new venture that will allow consumers to download songs for free and instead rely on advertising for its revenues.

The new service, known as SpiralFrog, represents a departure from the 99-cent per-song business model made popular by Apple's iTunes store. It will begin operations in December.

Universal's support reflects music companies' willingness to experiment as they try to capture some profit from the boom in digital distribution, which is still dominated by illegal file-sharing networks.

In spite of iTunes' popularity, a report released last month by the International Federation of Phonographic Industries revealed that there are still roughly 40 illegal downloads for every legal one as consumers continue to flock to peer-to-peer networks.

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