The key piece in this equation is, of course, RCRD LBL, the free-music-via-widgetry site that got a fair amount of press at its launch because it was founded in part by minor blogging deity Peter Rojas. (Who apparently learned all he needed to know about music blogging from running gadget-blog heavyweights Gizmodo and Engadget.) Since its launch, the site's offerings have mostly specialized in what would be considered bonus tracks by boutique-ish indie acts that would, well, be covered by The Fader; not that I don't like Bat For Lashes or Wye Oak, but for a site that made such a big deal about making the money it was paying artists back via ads, it sure did seem like it was forcibly constraining its demographic via its musical offerings.

Note that a Santogold song posted six weeks ago is still at the top of the site's most-downloaded list after all this time; she's one of the few artists on the site who's actually exhibited some sort of mainstream appeal. Of course, part of that could be because she's one of the few artists with said appeal whose labels have allowed her to be on the site. (Being signed to RCRD LBL partner Downtown records surely helped.) That starpower might increase soon: According to Fortune Rojas et al are talking to "a big act" about releasing their next album, two tracks at a time and underwritten by a single sponsor. (Odds on said "big act" being one whose career was shepherded to breaking-even-on-the-advance stardom by a major label: 6-1. Odds on it being Gnarls Barkley: As close to even as you can get.)

Add all those factors up and you'll see why I've been generally skeptical about the whole venture, why I haven't really had much reason to visit it (although I heard the Santogold song was pretty great), and why after all this time I've found its two most notable aspects to be been the fact that it got as much traction as it did despite requiring so many clicks to get from a blog post to a song, and the fact that bloggers actually seemed to be honoring the site's simple "Please don't repost these songs, thx" request. One wonders if advertisers are starting to see the site's drawbacks as well, and that part of the reason the ad-network idea (and its faulty math) seems like a good idea now is the fact that "curated" aspect of the site is starting to lose its appeal as the overall ad market weakens, and as the seemingly desirable demographic that needs the latest A Place To Bury Strangers download simultaneously shrinks and becomes less and less golden in the eyes of advertisers.

Music blogs' network effect [Fortune]

"I cared until I saw that there were no full albums."

"A cursory glance at the new site reveals photographs of sickly pale, skinny white dudes who are probably artistic. Interesting."

"I've signed up for the site already, and I find the entire thing extremely difficult to use, and half the shit doesn't make sense. I can't even search for a band. and they have no ska. boo."

"Hopefully they will help promote new artists instead of opting out to rehash 90's artists that are looking to make a quick buck off of the anti-RIAA zeitgeist."

No ska! Sickly pale, skinny white dudes! (Who do they think makes the blog world go 'round, anyway? We dont get out of the house much.) '90s dinosaur rockers riding the anti-RIAA sentiment in the air at the moment! (Like, um, Grizzly Bear and the roster of German techno label Kompakt?) No ska! But most importantly, no full albums! Can you even give music away these days? If tech-savvy readers* are having a hard time grasping how the (legit or otherwise) single-serving MP3 blog works and/or expecting/demanding it to work like OiNK or iTunes...

Engadget Founder Peter Rojas's New Digital Music Site RCRD LBL Launches [Digg]

* Well, tech-savvy enough to read Digg, anyway.

Rcrd Lbl has signed contracts giving it the right to distribute a handful of songs from 40 to 50 bands, including some, but not all, of Downtown Records' artists. For instance, there are no plans for Downtown's marquee act, Gnarls Barkley (the duo behind last year's alternative hip-hop hit "Crazy"), to contribute music to Rcrd Lbl. On the other hand, the hot indie rock band Cold War Kids and high-profile rapper Mos Def, both signed to Downtown, will have music on the site.

Rcrd Lbl's artist contracts are unusual — chiefly in that they make the company the exclusive distributor of a specific number of songs, not for an act's entire musical output, as is the case in traditional record deals. "It's a blog," says Mr. Deutsch. "We're not necessarily trying to tie you up for your fifth album."

Big-name advertisers have generally shied away from even the most influential music blogs, since most of the music they include is posted without permission. Thanks to their involvement with Rcrd Lbl, the company says it is launching in the black.

Artists with songs on Rcrd Lbl won't get a cut of advertising associated with their music; they'll get advances Mr. Deutsch characterized as modest for each song they give the label. These advances range from $500 a song for the least established artists, according to people who work in the music industry, and escalate for bigger names to around $5,000. Rcrd Lbl will divide with its artists any money that it makes from licensing their music to television shows, movies or TV commercials.

RCRD LBL is pitching itself as "music we like," but obviously that term is a bit of sleight-of-hand; it's more like "music we like from artists and labels who are willing to work with us." (Although I do have to tip my hat at them coming out of the gate with a totally utterly blogger-approved collaboration between Justice and Spank Rock and Mos Def. Way to get that elbo.ws love!) It's like the old promo-track trick used by promo companies all over the Internet, but with money behind it and the dreaded term "exclusive MP3" being thrown around more than usual.

In a way, this take on monetized music blogging reminds me of the Radiohead experiment, in that both Rojas and Radiohead are already pre-existing brands who have some loyalty; Rojas' gadget-blogging background will probably earn him some extra love/eyeballs from the "free music at all costs" Digg crowd. But as Glenn at Coolfer noted in his ruminations on In Rainbows yesterday, trying to get people to change their music-acquisition habits is a trick. Sure, members of the MP3-blog-reading crowd will add RCRD LBL to their RSS feeds. But will enough regular-Joe music fans be willing to change their music-ferreting habits—and take risks on new artists—to sustain the advances paid out to bands? Or will people just wait for the MP3s offered by the site to show up on their favorite torrent tracker?

RCRD LBL [Official site]
Music Test: Can a Firm Profit From Free Tunes? [WSJ]

In a move designed to upend the traditional record label business model, Downtown Records and Internet entrepreneur Peter Rojas plan to launch an online-only record label that will offer its music for free and generate revenue only through advertising and sponsorships, The Post has learned.

Dubbed RCRD LBL and targeted for launch this fall, the venture aims to merge free, exclusive music with niche blog content to offer advertisers highly targeted sponsorship opportunities. Or, to put it another way, the label marries Downtown's ability to identify cutting-edge artists - the label's roster includes blog-beloved bands like Gnarls Barkley and Cold War Kids - with the architecture of Rojas' weblogs to create a next-generation online music company.

One source familiar with the project described it as a "curated YouTube or MySpace for music with an editorially driven filter."

While this new venture hasn't actually signed any artists yet, that hasn't stopped investors from being optimistic:

According to a preliminary business outline obtained by The Post, the venture offers advertisers three different levels of sponsorship packages that feature a combination of contest, podcast and "single of the week" sponsorships as well as advertising plug-ins that run over the course of several months.

Sources said the idea seems to have a lot of traction judging by initial conversations with Madison Avenue.

While these sources declined to provide revenue projections for the venture, they did say that they were "confident that the Web site will generate significant revenue early on."

While we agree that labels have to look beyond the idea of record sales being the prime source of revenue, we have to say that the label's prospects for success aren't certain—after all, they'll still depend on which artists the label signs, a list that is currently empty. Yes, Downtown has a great track record as far as spotting buzzy bands that get a lot of online attention, and the music's low cost will certainly help as far as stoking initial awareness—but the assumption that audiences will be as enthusiastic about these bands as advertisers are is a big jump, blogs or no blogs, and it's reflective of the "we will tell you what you'll like" attitude that's helped larger record labels get into the mess they're in right now.

USING ADS, NEW ONLINE LABEL OFFERS MUSIC FREE [NYP]

[Disclosure: Rojas is the Chief Strategy Officer for Weblogs, Inc., a competitor of Idolator's parent company, Gawker Media.]