I’ve been hearing a lot about Spotify this week, so I thought I’d take this opportunity to point out what I perceive to be the fundamental problem with ad-supported music sites:

Who wants to advertise to people who are too cheap to spend $0.99?

I mean, seriously, is there a lower-value audience than people who are too mean to buy the cheapest product in ecommerce and too dumb to steal it?

Whenever an ad-supported store launches, there’s a flurry of press stuffed with grand quotes about a utopian society in which music is free and artists get paid.

In Thomas Moore’s Utopia there are slaves doing all the actual work. In the modern musical version, there’s good old fashioned VC money which (somehow) still exists for a long-shot at the next big thing in digital music, and there’s always the private fortune of a dotcom millionaire who fancies himself in the music business.

The labels know that there’s no long-term business model in using advertising to pay for music, but there’s a good short-term model in taking the advance in return for delivering content that won’t even have been posted by the time the cash runs out, the customers fail to materialize, and ad revenue remains mysteriously absent.

Where do you think all of SpiralFrog’s money went? They can’t have spent it all on hype.

Still, it’s fun to write about ad-supported music. The idea of entertainment being free is just too compelling to ignore, the competition won’t dignify any of this nonsense with a comment and nobody at the labels is going to poo-poo the model too loudly while they’re still getting paid.

Sometimes I wonder if there’s more money to be made exploiting the greed, vanity and naked ambition of those trying to get into the music business than there is from actually selling music in its various forms.

The real story, played out with verifiable facts, consecutive quarters of growth and cleared funds in the bank, is that people will pay for music if you make it easy, and the land-grab for the digital music market is mostly over with opportunities remaining in a small number of niche markets. Trouble is, that’s very boring to write about.