Advertisers Look to Music Blogs To Push Product

Pity the music industry. Between 99-cent downloads, free - if not always legal -file-sharing services and MP3 blogs, and an increasingly fragmented audience, it’s desperately in need of a new revenue stream.

Jon Cohen and Rob Stone, two veteran music marketers, think they’ve got one: advertisers that will underwrite free downloading. They’ve put together of network of MP3 blogs including three of their own such sites - thefader.com, thetripwire.com and 1200squad.com - and RCRD LBL, an innovative web music destination run by Peter Rojas, founder of Engadget and Gizmodo.

It’s not surprising that Cohen and Stone marry blue-chip sponsors and bloggers. As the principals of New York-based Cornerstone Promotion, a music-marketing firm, they have worked with Ford (F, Fortune 500), Nike (NKE, Fortune 500), Levi Strauss and Converse. Plus, they have street credibility to spare. They’re the founders of The Fader, a glossy magazine that puts breakthrough acts like Kanye West and the White Stripes on the cover just before the rest of the world takes notice of them.

MP3 blogs, meanwhile, have a tough time selling ads on their own. Many, of course, post songs without the permission of copyright holders. And even the biggest legit ones are too small to have much clout with big media buyers. Thefader.com, for instance, has 93,000 unique monthly users. RCRD LBL has 125,000. Thetripwire.com, an “indie” rock destination, has 15,000. The hip-hop oriented 1200squad.com has only registered users. That’s because it doesn’t allow just anybody to join. So far only 2,500 people have qualified.

By rolling the sites into a network, Cohen and Stone can now approach advertisers with an audience of nearly 240,000. “It’s easier for our corporate clients to get their heads around this because they aren’t buying 12 different sites,” says Stone.

Zune’s Stephenson says advertisers would love such an opportunity because they can be pretty sure of whom they would reach through a sponsorship. “With the right five bands, I can cover 100 percent of my target audience,” he says.

Bands could also benefit by giving their music away. Radiohead earned a lot of good will and publicity when it allowed fans to pay what they liked to download “In Rainbows.” Thom Yorke and his anti-corporate mates might not agree to a sponsorship deal with, say, Lexus. Okay, but what if it was a hybrid Lexus?