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10/19/2006
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Brief: Dinged By Visa, Allofmp3.com Shifts To Ad-Supported Model

A music download site in Russia is apparently shifting to an advertiser-supported business model after Visa International stopped processing credit card payments from the site, which the credit card giant says violates piracy rules.

A Moscow-based music download site is apparently shifting to an advertiser supported business model after Visa International stopped processing credit card payments from the site, which the credit card giant says violated piracy rules.

"Visa members are not permitted to process Visa transactions for allofmp3.com, a Russian website which sells electronic content," said Simon Barker, a Visa spokesman. "The action Visa has taken is in line with legislation passed in Russia and with basic international copyright and intellectual property norms."

Operators of allofmp3.com have asserted that the business is legal because it pays taxes on revenue in Russia and royalties to ROMS, which operates Russian online store licenses. Indeed, the firm took its case to an online media briefing on Tuesday. During the presentation, Vadim Mamotin, director general, said the company is "in complete compliance with Russia law."

Allofmp3 told the International Herald Tribune Tuesday it will operate under a new business model that moves it toward ad-supported distribution of free content. The company plans to offer consumers a software program that allows them to download any song from the site for free.

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