Submitted by: kirkland on Wednesday August 30th, 2006 at 04:42 PM EST

Music fans for years have been telling record labels what they want to pay for downloaded songs: nothing.

Now the labels are starting to agree that free might work for them too.

Universal Music Group announced Tuesday that it would license its digital catalog to a website offering free legal downloads. The two-year deal marks a significant shift in an industry long criticized for fighting, rather than harnessing, the Internet's potential.

The new website, backed by New York company SpiralFrog, hopes to make money selling advertisements that play while songs download. In addition to Universal's artists, which include Mariah Carey, Eminem, U2 and Kanye West, SpiralFrog is seeking to license the catalogs of Sony BMG Music Entertainment, Warner Music Group and EMI Group.

The deal between SpiralFrog and Universal Music, the world's largest record seller, reflects how the entertainment industry is scrambling to find new ways to make money as the Internet rewrites the rules of distribution and marketing.

» Full story @ LA Times