The assertion by Qtrax that they had deals in place with three of the four major record labels is a lesson in how not to do things.
At the Midem conference in Cannes, France, Qtrax said they had agreements with Universal, EMI and Warner Music, to offer songs on their peer-to-peer network, which would have meant they would be able to offer around 25 million songs to users, far greater than any of the other online music stores.
All three of the companies have denied there are any deals in place with the company, although there have been negotiations. The president of Qtrax, Allan Klepfisz said in a statement that Warner was soon to agree to the terms, and the others were soon to follow. That doesn't seem to be the case.
It would have been far better for Qtrax to wait before announcing anything, for the obvious reason they don't have any formal deal in place, could jeopardize the possibility of making a deal, and it makes them look amateurish.
Qtrax a P2P company, was launched not long after Napster was closed down in 2002, but shut down only a short time afterwards to avoid litigation.
The offer by Qtrax to the labels was to provide P2P to users, along with a different type of digital rights management that was much more user-friendly. They claim to have given up most of the revenue in an attempt to secure the deal.
It looks like a launch of some sort has happened, but the company says that a large number of users weren't able to access the site because of the huge demand for the service.
Assuming the reason for inability to access the site is accurate, it also shows more poor leadership in not having backup plans in place that would have automatically increased the download capacity. Overall it's been very poor management and execution of the marketing and operations side of the endeavor.
It just shows we shouldn't make announcements that aren't sure deals. It does much more harm than if we hadn't announced it at all. In this case it not only makes Qtrax look bad, but weakens their credibility. They were in too much of a hurry to do this, rather than have the right things in place for a successful launch.
Don't misunderstand what I'm saying here, there's never a time when everything will be perfect in reference to launching new products or services, but the mistakes made by Qtrax were the type that were very basic to success, and showed an extreme lack of knowledge in how to operate a marketing campaign and operations.
The types of mistakes they made were not the type that should be made.
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