Qtrax Really Blows Its Launch

This is being covered to death elsewhere, so I won’t spend too much time on it. But if a startup is going to spend nearly $1 million announcing a new digital music service claiming more than 25 million free legal song downloads, it might want to coordinate its announcement with the music labels it is supposedly partnering with.

In what may be the dumbest business move of the year so far, Qtrax announced its free music download service this weekend before bothering to sign contracts with three of the four major labels. Now the music companies are saying, “Wait a second, there is no deal yet. We’re just talking to Qtrax.” Without the labels on board, there is no service.

We jumped on this story just like many other blogs and media outlets. Michael got a little excited about the prospect of ad-supported music downloads, and threw up a post while changing planes on his way back to the U.S. from Davos. The Times of London and many others bought the story as well. Maybe it was because the company’s CEO, with a straight face, told an audience at a music conference in Cannes and members of the press that all the major labels had signed on. That was clearly a misrepresentation, possibly a fraudulent one. Hyping your product is one thing. Telling an outright lie is another.

Qtrax is a subsidiary of Brilliant Technologies Corporation, which trades as penny stock, has not filed a 10Q with the SEC since last May), and has raised $30 million to launch this service. Its next move had better be more brilliant than its last one.