Streamwaves Aims to Get Kazaa Users to Pay

Like an ice salesman setting up shop in Anchorage, an online music service plans to start recruiting paying subscribers today on the leading outlet for free music on the Internet.

Dallas-based Streamwaves is the first music service backed by the major record companies to cozy up to Kazaa, an online file-sharing network that attracts at least 4 million users at any given moment.

In addition to running advertisements on Kazaa software, Streamwaves plans to use Altnet, a subsidiary of Woodland Hills-based Brilliant Digital Entertainment Inc., to deliver 30-second samples of the songs on its service to Kazaa users.

“Our main goal is to generate as many subscribers paying for music as possible,” said Jeff Tribble, Streamwaves’ chief executive.

And why should Kazaa users pay Streamwaves as much as $15 a month for music they could download free, albeit illegally? “At a low price point,” Tribble said, “they’re willing to pay for convenience.”

Several record company executives welcomed Streamwaves’ move, saying it could help lead some listeners away from illegal file sharing. The labels blame rampant piracy on Kazaa and other online networks for the prolonged slump in CD sales.

Kazaa software lets users search each others’ computers for files that match a particular artist, title or keyword. Once the list of matching results appears, they can copy any of the files simply by clicking on its name.

Altnet pays Kazaa for the right to place its clients’ files at the top of the search results. Those files are scrambled to deter piracy and, in some cases, require users to pay to play them.

Under Streamwaves’ deal with Altnet, Kazaa users who search for many major-label artists or songs will find a link to Streamwaves at the top of their list of results. Clicking on that link will launch Streamwaves’ software, providing samples of numerous songs by the artist and related performers from an online jukebox. To deter copying, Streamwaves streams music to users, rather than offering downloadable tracks.

The link also will prompt users to try the service free – briefly. Tribble said the company has converted three-quarters of the free samplers into paying customers, but it hasn’t gotten the exposure needed to rise above “the low thousands” of subscribers.

Hence the deal with Altnet, which marks the first major promotional effort for Streamwaves, Tribble said. The firm recently changed its focus from providing services wholesale to other online music outlets to delivering music directly to consumers.