"Twenty years ago, the thought of encouraging advertising with music would be like offering your daughter to the devil," quipped ex-Genesis frontman Peter Gabriel to The Guardian.

"But people have gotten used to free music, and this is one of the few ways that musicians can still earn in a free music environment," he continued, referring to his music venture, We7, an ad-supported service that offers free music downloads.

Gabriel introduced the concept in May '07, positioning it as an "easier and better alternative to piracy."

The idea was to let users play complete tracks and albums at no cost. They can also interact with the music via playlist creation, sharing favorites, and embedding songs onto their online profiles — like a mashup of iTunes and social networking sites.

To fund the music offerings, We7 collects demographic information about users, such as age and location, so marketers can serve personalized, hyper-targeted ads to them. Each song has an ad tacked to the front of it, like ads on the radio or "pre-rolls" in online video. Revenue is split between site, artist and record label.

For each hour of music, We7 plays an average of two minutes of ads — far less than radio. Only about half of the two million songs in the database are from the four major labels; after a certain number of listens, users must buy the songs to hear them again. This option makes the tracks DRM- and ad-free.)

There is no shortage of comparable services: CBS-owned Last.fm and Sonific both offer the same social features as We7, and SpiralFrog and Ruckus began cajoling record labels to avail music free online in exchange for ad revenue. A year ago, startup Qtrax talked Sony BMG, Warner Music, and EMI Group into deals that would make their songs playable a certain number of times before purchase.

All have the same goal, however: To turn so-called filesharing "pirates" into paying consumers. "You can't get people to consume the way you want them to," said Nettwerk Music Group's CEO in April '07. "Figure out how they’re consuming music, market to that and monetize their behavior."

A year ago, the Direct Marketing Association (DMA) found that, given a choice, 72% of web users prefer that websites rely on advertising for revenue rather than charge them for web content.