Claes Loberg Quote

“The music industry have been trying to get advertisers to pay for content but the ad model they’re using is based on TV advertising. That works when you run an ad model where you control the stream and advertisers can disrupt that stream. But in an interactive world where you can get past ads, any concept based on disruption or banner ads where you’re distracting people doesn’t work. The 1950s model no longer works – disruption or distraction advertising isn’t the way ahead. The only way you can do it is engagement based advertising.”

Claes Loberg, CEO of Guvera

In response, during an interview with MusicAlly.com, to why the current ad-based music business model no longer works

Free, Free, Free Music for Aussies via GUVERA

Guvera, the new music service that sounds like a fruit,  is oh-so-mysterious and is marketing itself almost guerilla-style. The design reminds me of either a shoe brand, or Che. With the words “Welcome To The Revolution… Digital Entertainment is About to be Changed Forever” printed on the website so huge you cannot miss it, it has announced itself on the web with a decided bang, and it does look pretty good, actually. If you’re not already frightened off by the strong association with socialism of course.

“We found a way to make it free… while everyone still gets paid,” jumped the words on the site, a la old movie film style. What they mean is that it will be an ad-based site, while promising to offer music suggestions based on intense user personality profiling. In business terms, this means that users will be directed to related brands closely associated with their personalities, something that Facebook has been attempting to succeed at for awhile now. I can attest to the intensity of the profiling. Just signing up to be a pre-user for their beta service required me to fill in at least 20 questions about my favourite music, sport, and even charity (education? animals? etc.). If it doesn’t annoy you, it would certainly intrigue you.

The Australian-based Guvera has clinched itself an exclusive deal with Universal Music Group to start off their service with, promising at least 30% of the world’s music catalogue on their site.

They’re not here to be messed around with, it seems. “Preparing an assault on the world of music,” tweets Guvera (@Guvera), promising with its strong language completely free music for Guvera users and amazing returns for the advertisers. Universal Music seems ready to take a leap of faith and embrace Guvera’s business model, something that’s different from their usual telco tie-ups.

“Universal Music is committed to cultivating legitimate online entertainment by offering our consumers even more ways to enjoy the musical experience where they want, how they want and in the manner of their choosing,” commits David Ring, EVP of Business Development & Business Affairs for UMG. How does the label make money then? The model will require advertisers to pay a fee to the label whenever music is downloaded, ensuring that the label has a vested interest in the number of potential users who will download music on Guvera. I wonder how advertisers feel about this.

At the time of writing this post, Guvera’s press releases on their website aren’t showing. Guvera launches in Australia on 15Dec’09, and will launch on New Year in the United States.

I don’t know about you but just the logo alone excites me and gives me the shivers.