We7 proving ad-supported music has a future?

Ad-supported music seems to be gaining traction as a business model. We7, a UK-based music download service driven by advertising sales, has raised a $6M Series ‘A’ round led by musician/investor Peter Gabriel and Spark Ventures and UK VC firm Eden Ventures. The founders of We7 are John Taysom, chairman, and CEO Steve Purdham. Purdham founded SurfControl, a publicly-traded firm that was acquired by Websense last year for about £204m. After one year We7 says it has some 90,000 users and has delivered over one million ad-supported music files from a catalogue of over 80,000 tracks. Ad trials have been run for Microsoft Xbox 360, Sony Ericsson and Café Direct. Joining the board is Eden Ventures, Charles Grimsdale, who co-founded music distribution service OD2 (along with Gabriel), in Nokia’s hands since 2006, and is a co-founder of Eden Ventures. Global digital music sales were estimated to have a trade value of $2 Billion last year, but digital ad spend was around £2.5 billion in the UK alone, which makes one think that music may have a way out of the file-sharing nightmare it voluntarily got itself into.