Recently We7, the music download and streaming website, announced it had struck deal with EMI to use a large portion of its music catalogue. We7 would offer free music via its website by adding audio advertisements to the beginning of the tracks, and then streaming them.

Recently the website also secured backing from music labels SonyBMG and Warner, but both were very wary of using embedded audio ads as a revenue stream. According to We7 CEO, Steve Purdham, many music labels are against the concept of marrying ads with music, though radio stations have done it for years as a method for gaining revenues.

Instead it’s more MP3 downloads that We7 is likely to concentrate on.

According to Steve Purdham:

Ad-funded downloads have had to take a slightly rear seat, the main reason is the economics between industry expectations and what the ad world is prepared to pay meas that the gap is still too wide.

The music world has moved very positively in the last six months in embracing new ideas but there are more changes to happen before ad-funded downloading really kicks in. So ad-funded streaming is the order of the day for now.