uPlayMe-

Don Pelson thinks licensing music for online distribution is dumb. He should know: the former consumer marketing SVP at Warner Music Group wants to create a community around the music people already own play, and with uPlayMe he thinks he’s hit on a missing link.

UPlayMe will definitely not be signing licensing deals with the major labels to distribute music. Pelson sees music distribution as an overcrowded market plagued by hefty licensing fees, offering little room for a startup to connect music consumers around the music and videos they watch.

"To be blunt, the cost of licensing music is so significant that I don't see the possibility of putting an ad-based music service around music, if you're delivering it to the consumer," Pelson told us via phone. "Pandora, Rhapsody and the rest don't work, and over the next 24 months, licensing models will change. People who licensed (music catalogs at today's prices) will feel dumb."

Consumers already have plenty of places to check out music and videos. Why bother joining that crowded field? So uPlayMe takes a different tack: letting other companies handle the distribution of music while it concentrates on helping listeners communicate with each other about what they're hearing, regardless of where they're hearing it. "The content is there," said Pelson. "That's not the value proposition, that's not the problem that needs to be solved. It's 'how do you make music social again, how do you add value?'"

The uPlayMe application, released this week after about a year of development, sits on your Windows or Macintosh computer, checking out what you play in a wide range of online and offline music applications: iTunes, Windows Media Player, Winamp, YouTube, Last.fm, Pandora, Hulu, Metacafe and CBS Radio. UPlayMe watches what you play in these programs to create a realistic portrait of your media consumption habits. Luckily for occasional fans of adult or controversial content, it offers a way to delete objectionable media from your list.

Once it has a good picture of your listening and viewing habits, uPlayMe recommends new content and hooks you up with people who are into the same stuff. Once you make friends with people on the site, you can see what they're watching or listening to in real time. In addition, it shows you which other members are consuming the exact same piece of content as you at a certain time, so you can send them a message or check out their profile (see screenshot to the right).

The company is adding the ability to share and discuss media with people who don't have the application installed, as well. Those people will get updates via e-mail instead of being able to watch or listen inside the uPlayMe desktop application. Essentially, your friends become your filters, just like in real life.

The concept is somewhat similar to that of Last.fm, but Pelson sees an opportunity to leapfrog ahead of that site as it works on integrating with CBS and another CBS acquisition, CNET. In addition, Last.fm doesn't "scrobble" playback behavior from as many sources as uPlayMe. As for the social music behemoth iLike, which claims 28 million users, Pelson says most of those people don't use the service on a regular basis. He says uPlayMe's growth rate of 2,000 desktop installs per day is more significant.

So how is uPlayMe going to make money on music and videos without hosting or distributing them? In addition to receiving kickbacks for ticket and music sales, the answer, of course, is advertising. UPlayMe plans to offer user demographics to advertisers at a lower cost than other avenues will be able to match.

"Do you want to sponsor Madonna?" asked Pelson. "It used to be you'd write a huge check and talk to her manager. Here, we'll place your ad every time we play Madonna (by matching an ad to the song's metadata)," adding, "there's no reason we cannot do this legally."

By finding a spot between consumers and their media without having to license the media, uPlayMe could build a formidable business, assuming consumers continue to install the application. It essentially mirrors the way many of us consume media (via instant message or email from a friend) in a way that's both faster and more passive. All you have to do is listen to something or watch it as you normally would, and your friends will see it. Plans for the future include a mobile application that will overlay peoples' geographic locations into the network, so that you can find people in your immediate area who are into the same stuff.

Warner Music Group was impressed too. The company invested in uPlayMe in July.