by Tim Gideon
Here’s an example of how smart record labels are operating these days. At some point in the last few years, the independent labels noticed a trend: Of those who were still actually paying for music, very few people were buying CDs anymore, some people were still buying vinyl, and most were downloading music via iTunes or other sources. So the independent labels have started making better-looking packages and higher-quality pressings of vinyl releases, and including coupons for free digital downloads of the full records. Are they nuts? Why on earth would they give irresponsible consumers, the Joel Tenenbaums and Jammie Thomas-Rassets of the world, files that aren’t protected, that can be passed on from friend to friend or traded on the Internet?
Because they like making money.
One thing about Joel Tenenbaum: He admits to “swapping” several hundred files over the past ten years, but he also bought more than $100 worth of CDs during that time. Tenenbaum represents a stereotype: someone who swaps songs online, and is—duh—a music lover. Not all of the people like this are rich, so there are only so many CDs—or digital downloads—they can afford. Make no mistake: Music lovers still purchase songs, even full albums. But the Internet has made it easier for enthusiasts to get their hands on music they might not have otherwise bought.
A funny thing can happen when someone listens to a free album and really likes it: That person may become a fan, or what record companies have come to know as “the only thing that keeps us employed.” So, wisely, the indie labels realized that maybe they should keep those folks happy.
I imagine the thought process probably went something like this: If they’re willing to buy vinyl, let’s reward them with a free digital download, so they can also listen to the record on their iPods. They may decide to share these files, but let’s be rational: At worst, there’s nothing we can do about it; at best, it’s free advertising. Someone who might have never heard this record may become—what’s that term again?—oh, yes, a fan. Or even someone who goes to live shows, buys merchandise, and coughs up for future records.
Now, I’m not suggesting that the major labels revert to selling only vinyl and offering free digital downloads. These are just some ways smart companies have adapted to the new way music is consumed, instead of fighting it. And to be fair, Nonesuch Records, which is owned by Warner, offered a free CD—forget the download—with the vinyl package for Wilco’s latest record. Nonesuch, however, is a rare breed: a label with independent spirit and artists that also has major-label backing.
In general, the major labels are afraid of digital files—look at how long it took them to remove DRM (digital-rights management, or copy-protection coding) from their iTunes offerings. The Big Four have all been loath to adapt to the Internet and develop lucrative business plans, though file-sharing and the Web have been popular for well over a decade now.
What’s a multi-billion dollar industry to do? Well, for starters, it could develop a new way of thinking about file-sharing and copy protection, as the indie labels have. Or it could sue the pants off some kid who is just about as guilty as most of us. After all, they already succeeded in getting millions out of a single mom, right? It’s a Pyrrhic victory at best—they’re unlikely to collect, and now they’re facing a public backlash.
This article was re-published from PC Mag @ http://www.pcmag.com/article2/0,2817,2351132,00.asp