Will P2P replace labels for promotion/distri bution ?

[David Farber <dave () farber net>]

_______________ Forward Header _______________
Subject:        Will P2P replace labels for promotion/distribution ?
Author: Barry Ritholtz <ritholtz () optonline net>
Date:           18th December 2004 8:44:30 am

<bigger>Hey Dave,


Mind if I change the subject post-election?  There's a real
interesting story brewing which has not received much ink lately; I
think its worth exploring.


It seems that several big name bands may have been surreptitiously
releasing their albums to P2P networks as a marketing mechanism. This
has potentially enormous implications for the major labels and the
internet as a distribution / promotional mechanism.


Eminem did it earlier in his carfeer
(http://bigpicture.typepad.com/comments/2004/11/no_coincidences.html).
Wilco, when they were "between labels" managed to stream an unreleased
CD.
(http://bigpicture.typepad.com/comments/2004/11/the_internet_is.html)
Once they did release it, it sold better than anything they previously
had done.  


Here's the specifics:


<bold>Was U2's P2P release a Marketing Ploy?

</bold></bigger><underline><color><param>1996,1996,FFFC</param>http://bigpicture.typepad.com/comments/2004/11/was_u2s_p2p_rel.html</color></underline>


With the elections behind us, we can now get back down to business.
Amongst all this Red State/Blue State stuff, we have been overlooking
the industry everyone loves to hate, the music biz.


You may recall back in July we discussed Radio's wounded business
model; How thru consolidation of ownership, the elimination of local
program managers and DJs  and generally short sighted planning, Radio
has lost much of its influence as a "hit maker" to the internet and
P2P.


Thank the Telecommunications Act of 1996 for this. That was the
enabling legislation which allowed Clear Channel Communications
(amongst others) to ramp up its massive consolidation of ownership,
accumulating many stations -- and eliminating much of the competition
from the radio industry.


In the face of this, some conspiracy theorists believe that a major
artist has gotten tired of the big Labels internet incompetence. The
alleged theft of U2's "How To Dismantle an Atomic Bomb," and its
subsequent release on the P2P networks, is being suggested as not a
theft at all.


The labels may not understand P2P, but according to this theory, the
band does. It seems Interscope Records (Geffen) wouldn't allow Bono &
Co. to release their tracks to the P2P networks. So their master
recording "accidentally" got left somewhere (or stolen, depending upon
which story you believe). Lo and behold, How To Dismantle an Atomic
Bomb is showing up on Grokster, Limewire, Acquisition, Kazaa, Bit
Torrent,  etc.


Incidentally, the last CD that this happened to was Eminem's, which
despite all the file trading (or more likely, because of it) was a
huge 8 million+ seller. Eminem's label?  Its also (not coincidentally)
Interscope.


Here's what Audio Revolution had to say about it:


<excerpt>"Critics suggest that the theft of How To Dismantle an Atomic
Bomb and its subsequent pre-release to the peer-to-peer sites might
have been done for promotional purposes. If this is true, it is one of
the first truly brilliant marketing moves to promote a big-release
record in years.


    The RIAA, with the support of the major labels, have been fighting
file downloading in all forms while ignoring the media of the internet
and PTP networks as a vastly powerful marketing tool. Since the
1960’s, FM radio was a make-it-or-break-it medium for new pop music.


    In the last 10 to 15 years radio groups, many of whom own hundreds
or in one case over 1000 radio stations in the US, have very much lost
their power to reach the young GenY, record buying public. They are
better reached via email, on a cell phone or through a peer-to-peer
network.


    Moreover, as much as the RIAA would argue the opposite, some
suggest that the idea of an album getting on the Internet for illegal
downloads actually boosts its overall sales. The last major artist
this phenomenon of an “unauthorized pre-release on the net” happened
to was Eminem and his record sold like hotcakes.


    Expect U2’s How To Dismantle an Atomic Bomb to hit store shelves
early (but not too early to be the big pop release for the 2004
holiday season) and to sell like wildfire. Most likely the record will
sell better than if there was no scandal over the tracks being
available on the peer-to-peer networks and the associated free
advertising that comes from the story."   (emphasis added)

</excerpt>

Ironically, despite the promotional assistance, the labels remain
publicly dead set against legitimizing P2P in any way. Privately, they
subscribe to services such as Big Champagne to track what is being
downloaded. BC is the new Billboard.


If the U2 CD sells big, expect to see a spate of other "stolen" master
recordings subsequently showing up online.


The only question is how long will it takes before some label hires a
P2P savvy label exec. Once the labels finally wake up to what
Clearchannel has done to their business model, they can finish off
radio's slow death and move fully into the digital age.



<italic>Source</italic>:

Was New U2 Album Hitting P-2-P Networks on Purpose?

Jerry Del Colliano

Audio Video Revolution, November 9, 2004

<underline><color><param>1996,1996,FFFC</param>http://www.avrev.com/news/1104/9.u2.html</color></underline>



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