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There have been a lot of launch flops in the online world over the years, but the blown launch by widely-hyped online ad-supported music service Qtrax may be the biggest in recent memory.
Qtrax is an online music service that has made a huge promise to consumers -unlimited, ad-supported music downloads from the major record labels. It was expected to launch at midnight on January 28.
The company had received widespread press attention and threw a wild launch party at the MIDEM music business conference over the weekend (due to other commitments, Drama 2.0 was unfortunately unable to attend).
With major labels supposedly supporting a system under which consumers would have access to their music catalogues for free in exchange for sharing ad revenue with Qtrax, some heralded Qtrax as the biggest thing since Napster and a signal that the record labels were finally willing to embrace new business models.
And then it all fell apart. Shortly before the scheduled launch, Warner Music Corp. issued a statement indicating that Qtrax did not have the rights to offer its music to consumers. Universal Music Group, EMI and Sony BMG followed by stating that they had not cemented a licensing deal with Qtrax either.
Qtrax's CEO Allan Klepfisz essentially confirmed Monday that the record labels were telling the truth but insisted that agreements had been reached in principle and that everything would be resolved. At this moment, Qtrax has still not yet launched the service it promised.
According to the Associated Press:
"Some recording industry executives said Monday the botched launch likely wouldn't factor in final decisions on whether to sign off on the service."
Regardless of whether Qtrax does sign off on deals and move ahead successfully with its service with the support of the major record labels, the company's problems highlight just how important "getting it right" can be when launching a new service online.
Not only has the blown launch created a PR nightmare for a service that was incredibly hyped, it has thrown into question the credibility and judgment of the company's management.
That should not only have the record labels concerned, but should also have the sponsors that signed on pre-launch (including Boost Mobile, Kia Motors, Ford Sync and H&M) worried.
Qtrax's egregious mistakes were entirely avoidable had the company's management exercised some common sense. That said, common sense seems to be in short supply these days, so I submit three common sense tips that can help companies launch a new online service successfully:
Don't plan your launch until you have your ducks in a row.
Because deals had not been officially signed with the record labels, it almost boggles the mind to consider that Qtrax's executives would plan a launch as if they had been.
Drama 2.0 has a rule: the cork on the bottle of Dom never pops before the deal is signed (or money is in the bank, where applicable). After all, if the deal doesn't get signed, the Dom is probably being replaced with Jack Daniels.
Every expectation that you set needs to be met.
In the case of Qtrax, not only did it miss its launch date, it completely failed to provide what it had told consumers (and the media) to expect: unlimited free music downloads from the major record labels.
In other words, Qtrax didn't merely overpromise and underdeliver; it failed to deliver at all. When in doubt, don't launch (or underpromise and overdeliver instead).
Don't sell something before you have the ability to sell it.
How many of the sponsors that had signed with Qtrax would have signed had they known that Qtrax was not yet in a position to deliver what it was promising to consumers?
According to AdAge, H&M expected that the launch of Qtrax would coincide with the launch of its "Designers Against AIDS" marketing campaign involving several popular musicians.
This "launch synergy" could be in jeopardy and as such, depending on how the situation plays out, so too could Qtrax's relationship with H&M.
Few brands relish the thought of being associated with something that disappoints, as Facebook learned when some of its "partners" backed off their involvement with Project Beacon after it sparked widespread complaints. As such, it makes sense to ensure that your advertisers, sponsors and partners know what they're getting into.
Qtrax may very well recover and launch a service that changes the game in the online music space. But the company's blown launch was certainly avoidable.
Many companies never get a second chance to recover from a blown launch and thus avoiding the same types of mishaps Qtrax made could mean the difference between success and failure for the average company.