Qtrax had a disastrous debut in January, but the founder says nothing is really wrong, according to MediaPost on Thursday.

"Speaking at the Digital Music Forum East in New York on Wednesday, [Qtrax CEO Allen] Klepfisz boasted about the upcoming service -- which he repeatedly characterized as the first free, legal peer-to-peer music download service," Wendy Davis wrote.

The problem is that Qtrax doesn’t yet appear to have the licenses claimed for distribution from the four major record labels. However, Mr. Klepfisz insisted those are coming.

Regarding Mr. Klepfisz’s claim about his service, Ms. Davis pointed out: "Qtrax isn’t the first legal peer-to-peer service, since there’s nothing illegal about peer-to-peer technology. In fact, media companies are themselves using peer-to-peer technology to distribute their programs at sites like BitTorrent and Joost."

However, Qtrax may have bigger problems than a false start and delayed licenses. The business model for Qtrax involves restricted access through their own music browser. That browser tracks the user’s other online activity, namely other music purchases through sites like Amazon. That purchase is then reported back and Qtrax gets a cut of the revenue.

"...this model, based on tracking user activity through their browsers, has the potential to be highly intrusive -- certainly more so than what users bargain for. In fact, depending on Qtrax’s disclosures to users, the company could well find itself on the defensive with privacy advocates," Ms. Davis concluded.

Just about every kind of Music service one can imagine has been tried, and this one seems off to a worse start than most. Apple deserves credit for getting it right the first time. Even so, if selling music is so easy, it’s amazing how many startups manage to get it wrong.