Spotify - A real music model brought to you by advertising

While most people in the U.S. might not have heard of Spotify before, it is and has been hailed as a workable business model that both music companies and the music fan have been able to embrace.
Spotify recently gained attention throughout Europe and many parts of the world (where Spotify is available, which means mostly Europe) for U2 choosing them as an official partner to help release their new album. There business model for the most part has been widely accepted by the music industry in all of the countries that they are available, but for some reason not the U.S., which based on their fast growth and enthusiastic arrival might change soon. Some people feel that it is the best music app on the planet, and now with the release of the libspotify platform where developers can now make their app that much better, the sky is the limit. Right now, Spotify provides music to the listener for free by inserting a short 20 second advertisement every 30 min. of free music, which for the most part is not that much, and has been widely accepted as alright by the user. They also have a subscription if for some reason the short ad is too much, but with their very large collection of music, the easy user interface, etc... it is the opinion of the majority that it works just fine.

Back-end digital ROI with Avril Lavingne

Chris Anderson wrote about it in an amazing and forward looking article in Wired magazine that talked about the economy of free, specifically "freekonomics", where you provide some part or component of your brand or media to the consumer for free, hoping that they will purchase a premium part for a fee.

Avril Lavingne is one artist who says that she has received upwards of 2 million in revenue (her cut would of been much less after songwriters, composers, etc...), which shows that artists of all kinds have an opportunity to be entrepreneurial and increase revenue by in some ways incorporating the basis of what Chris Anderson was talking about. Provide something for free and sell on the back-end, a premise that goes back to Gillette amongst others.

This model shows promise for many musical artists or publishers that their is revenue potential after a huge drop in recored sales, and the record industries major reluctance to not embrace Napster/P2P as a new way to distribute music.

This shows that a "free" model works for music with the right partners, but it also shows that people are willing to pay for something that they want if some part of it is for free.