[opendtv] News: Music Labels Offer Teasers to Download

http://www.nytimes.com/2007/02/19/technology/19music.html?th&emc=th

February 19, 2007

Music Labels Offer Teasers to Download
By JEFF LEEDS
For all the disquiet the Internet has fostered in the music business, almost every rock star and record executive is intrigued with the prospect of marketing to music fans directly instead of wrangling for exposure with radio programmers or retailers.
But the expansion of the online marketplace, coupled with ever-worsening CD sales, is now all but forcing the music companies to tread on ground they once viewed as off limits.
Starting this week, Suretone Records, a label distributed by the Universal Music Group, plans to distribute video files featuring popular acts like Weezer and new bands like Drop Dead Gorgeous on file-sharing networks that the industry has long viewed as illicit bazaars for pirates.
Unlike the music audio and video files that major labels sell at services like iTunes, the video files will not be wrapped in protective software to limit copying, executives say. But they will also be incomplete: users who download them will see perhaps half the video and will be directed to the label's own Web site to watch the complete version - and the advertising planned to run alongside.
The plan represents one of the latest signs that, after years of suing individual users and file-swapping services, the recording industry is recognizing that it might have to loosen its control to attract the giant audience found in largely unregulated corners of the Internet.
And there is new reason for urgency. The music business has been buckling beneath the pressure of widespread piracy and plunging sales. Album sales declined 5 percent last year, and the scarcity of hits after the holidays has put the industry on a course to fall behind even last year's lackluster performance.
Sales for the year so far are down more than 15 percent, according to Nielsen SoundScan data. That has brought a profit warning from one music corporation, the EMI Group, and prompted dire forecasts industrywide.
Digital sales are increasing, but not nearly enough to offset the drop. As a result, many executives are searching for other ways to reach the people who are trafficking in music and other media files in free file-sharing networks and on social networking sites like MySpace and Facebook.
But how far the industry should go to appeal to them is now the subject of intense debate.
One big issue is whether the four music conglomerates that dominate the industry should drop copy protection software, known as digital rights management, from the music files they license for sale online.
The industry has already been dabbling in unprotected content, allowing the sale of songs from artists like Norah Jones, Jessica Simpson and Jesse McCartney on Yahoo and other sites.
An array of online music retailers has called for doing away with the software completely. Steven P. Jobs, the chief executive of Apple, whose iTunes music store is the most powerful of the those retailers, recently added his voice to the chorus, arguing that digital rights management has not halted piracy and that the industry's main format, the compact disc, carries unprotected files.
EMI has discussed the idea of distributing unprotected music files with certain retailers, but there is little indication that the four companies, which control more than 70 percent of the world's music sales, will be willing to offer much of their catalogs without such software anytime soon.
Still, there are indications that the record labels are re-examining their practices. RCA Records, for example, plans to advance its promotional campaign for Avril Lavigne's new album with the first in a series of short manga - Japanese comic-book episodes - in a storyline featuring the singer.
The video clips, which run two to three minutes each, are expected to be released in unprotected form as free podcasts on iTunes, among other outlets. Fans will also be able to use special software, probably offered on a label's Web site, to take snippets of the episodes and rearrange them, executives said.
Terry McBride, a longtime talent manager who represents Ms. Lavigne and other performers, said the campaign was a rare instance of a major label's agreeing to an uncontrolled release, and that he fully expected fans to post the clips on file-sharing networks. "This becomes public property," he said. "We're not going to tell the consumer how to consume."
But Mr. McBride predicted that sharing the files would promote the album and set the stage for other ventures, including the sale of higher-quality versions of the video clips, or possibly advertising to go along with them. In any event, he added, the more CD sales suffer, the more pressure will build on record labels to rethink the rules of distribution and to drop limits on copying digital music.
"At the end of the day the whole object should be, let's fix the problem," said Jordan Schur, who set up the Suretone label last year as a joint venture with Universal after leaving another Universal label, Geffen Records. "We know people are stealing music. We're not going to sit in judgment of them and say, 'Well, they're bad.' "
The label's files are being distributed online in an arrangement with ArtistDirect's MediaDefender unit, which is better known as a contractor hired by labels to place fake, or decoy, versions of songs or other media files on file-sharing networks to thwart would-be pirates.
Before the Suretone video deal, the company had also begun planting fake files containing promotional messages for advertisers like Coca-Cola. ArtistDirect separately runs one of the most popular music Web sites on the Internet, ArtistDirect.com, and plans to have a channel there devoted to Suretone's video clips.
Record labels are not shifting their view toward file-sharing across the board. Executives at Geffen recently found themselves at odds with the rap star Snoop Dogg, for example, after he started selling songs in unprotected form on his MySpace page, in a partnership with a San Francisco-area rap entrepreneur. Snoop Dogg also offered to sell other performers' songs on his page for a fee, a complete "push and promote" package costing $1,500.
The offer was removed last week after The New York Times inquired whether it conformed to MySpace's terms and conditions, which generally prohibit users from selling space on their pages to outsiders.
A number of independent artists offer their songs on MySpace. The reggae act Shaggy charges 99 cents a song, for example, and the band Barenaked Ladies charges 83 cents. 



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