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We7UPDATED - Ad supported downloads gained some traction as UK indie V2 signed a deal this week with Peter Gabriel's ad funded music download service We7 to make the label's full catalog available. Bloc Party, Stereophonics and Cold War Kids will now become available to download DRM-free for free alongside indie acts like Little Man Tate and The Rakes and indie label Cooperative Music.

We7 grafts short ads onto the start of tracks based on the consumer's demographics including location, age and gender. The advertising attached to the music will ensure that artists receive royalties and consumers get and can share DRM-free music. After a period of time users will have the choice to have the track ad free and there's an option to buy the track ad free at a normal price.

V2 Beth Appleton, V2's Head of Digital and Business Development says, "Online environments, such as We7, where music fans can enjoy music when they want, where they want, as they wish , where the experience to the music fan feels free and fun but critically labels and artists are being paid through a share of advertising is a business model for the future."

Several other as supported download services are at or near launch, but none so far offer the flexibility and viral potential of We7.

UPDATE - A bit of clarity from We7:

"The tracks don’t expire. The downloader gets the track for free with the grafted advert. Then they return to We7 after four weeks,  when they can claim their ad-free track which they then legally own as it has been bought by the advertiser. This track will never expire, as the artist has been paid by the advertiser."

"If they choose to buy the track straight out, it will be theirs legally and forever, as if bought from itunes or the like. If they pay for it, it will be ad-free from the start, just as it would be from any music download store.
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