In the bars on the Croisette, champagne flows less freely this year, and corporate credit cards are wielded with unusual restraint. Music executives massing in Cannes for their annual conference this week are worried about piracy and about falling sales.

But they believe they may have found a secret weapon in the battle - giving away all of their songs for free.

Radiohead blazed the trail when they offered their album In Rainbows on the internet last year for whatever price punters were willing to pay - an average of £2.90 as it turned out.

Now a host of new services, with the backing of major labels, are promising to revolutionise how music is distributed by offering millions of tracks, from much-hyped wannabes to established acts such as U2, for nothing.

Competing for attention at the Midem trade show, the services promise a global jukebox, paying for the free music by attracting advertising. Meanwhile, some acts are queueing up to swap their deals with labels for agreements with big advertisers which would further blur the line between bands and brands.

The move into a free service is a sea change for an industry which spent years fighting through the courts with companies offering free internet downloading and sharing of songs.

Radiohead's experiment was hailed a success when, after the album got a conventional release on paid-for CD, it went to No 1. EMI's new chief Guy Hands is angry that the band had to leave the label in order to carry out their experiment, and he cites it as the sort of thinking that could save the industry.

Now, after a 10% revenue slump in 2007, with rising digital profits failing to compensate for declining CD sales, labels are ready to embrace new models.

Yesterday's most high-profile launch, attended by artists including Radio 2 favourite James Blunt, was hosted by Qtrax.

"We want to bring free music into a legal environment," said chief executive Allan Klepfisz. "People don't want to be illegal, but they do want free music."

Illegal file-sharing can be made redundant by offering a legitimate alternative, he believed - a report by trade body IFPI said that despite a 40% rise in digital sales, for every legitimate download there are 20 illegal ones.

Launched today in nine countries, including the UK, Qtrax claims to offer more than 25m tracks, from all official releases by just about every major artist to so-called grey releases such as live bootlegs and alternate versions.

It claimed songs would be culled from the same peer-to-peer networks such as LimeWire and Gnutella that brought the industry to its knees, but filtered so viruses and spoof tracks are eradicated. Every time a song is downloaded by a user, they will be shown targeted advertising, and technology will ensure labels, publishers and artists are paid.

Advertisers include Burger King, Virgin Media, Ford, and H&M.

Users will not be able to burn downloaded songs to a CD but Klepfisz promised the service would be compatible with Apple's iPod from April 15. That is likely to provoke a backlash from Apple, which will seek to make Qtrax incompatible to protect its iTunes download store.

Other similar examples include We7.com, backed by singer Peter Gabriel. It offers about 80,000 free downloads, supported by 10-second adverts.

Blunt said artists were more open to new revenue models. "I find it amazing we should let people steal in the first place. But the music industry is in the condition it's in, and we have to try and find new ways."

Ric Salmon, former head of A&R at Warner Music, has brought music industry and advertising executives to launch Harvest Entertainment.

He plans to match artists with brands in an "open and transparent" relationship, believing that the former no longer feel they are selling out by getting into bed with companies.

He said he was in talks with 14 artists and would announce deals for two multi-million selling UK names in the next two months. The brands will fund recording costs, allowing the artist to retain most of the rights.

In return, the firms could put their name to tours, use them in advertising and work on exclusive internet, mobile phone and marketing promotions.

A string of big acts have shaken the labels by experimenting with new revenue models. In 2005 Bob Dylan released an album, Live at the Gaslight 1962, exclusively through Starbucks - a move that the coffee chain expanded last year to include free digital downloads from acts such as Joss Stone, Paul McCartney, Dave Matthews and Annie Lennox.

Madonna signed with concert promoter Live Nation in a $120m (£59m) deal, and Prince boosted live ticket sales by giving his latest album away free with a newspaper.

Free music

Qtrax.com - Launches today with a catalogue said to be of more than 25m songs. Users will be able to download for free but must watch streamed ads and can't burn songs to CD or, at least initially, transfer them to their iPod.

We7.com - Backed by former Genesis frontman and internet visionary Peter Gabriel, it secured another £3m in funding last week. Free downloads are supported by 10-second audio ads attached to the song.

Imeem.com - Following two years of negotiation, the US social networking site became the first to agree deals with all four major labels in December. Users can watch any music video or listen to any song within the site. Its UK launch will be later this year.

MySpace.com - One of the first, and still most popular, social networking sites with music at its core.

Facebook.com - Applications such as iLike allow users to listen to and recommend music within the confines of the site.

Last.fm - Recently signed a licensing deal with all four major labels and indies to allow any track to be listened to up to three times.