I'm still trying to get my head around music surviving as an ad supported business and I don't think it works.
Fred Wilson, the great blogger, seems to -- he has an interesting post on it here.
Let's take it from the top.
Advertising, a marketing activity, is a way for sellers to communicate with buyers. Along the chain of communication there are many opportunities for people with many different skills to cash in; creative people, copywriters, distribution networks and really anyone that gets people's attention. The problem with the last group is that, generally, those companies that get people's attention don't get it because their clientele wants to see advertisements. They're providing them with some other form of value and they say, in return for that value you have to look at these advertisements. That's the deal.
So given this logic I suppose it makes sense that the music industry should use the ad model to monetize its product. But doesn't this model have the same problem as the copyright model? Technology did away with that one and won't it just do away with the ads as well? TiVo and other ad killers are brilliant but they're only going to get smarter as the demand for avoiding ads becomes more intense.
Music (a form of art) can be reproduced and shared extremely cheaply because of technology. Ads can also be avoided with technology. Technology is killing both models.
So instead of searching for a way to monetize the music, artists need to realize that it can't be effectively monetized -- at least in the long run.
Therefore you've got to start selling something else. I say give away the music and sell interactivity -- that's a sustainable business model. Something that people will pay for that can't reproduced.
So really, I think the songs are the ads -- the ads for the artist. Once the consumer is hooked, then the consumer can be monetized.
The bottom line? Everyone can hear the music but not everyone can talk to the band.