Record labels try to bottle up leaks

[Analogman]

Record labels try to bottle up leaks

Music executives say prerelease album exposure hurts sales, and they're cracking down on a key source of the piracy: the media.

 

By Eric Benderoff

Tribune staff reporter

Published July 17, 2007

 

Prince's newest album, "Planet Earth," won't hit stores until July 24, but it's possible to buy it now on eBay -- and that's not unusual.

 

Prerelease "leaks" of promotional albums now are commonly found at file-sharing Web sites or on eBay months before an official release date, and once out, can gain massive distribution within hours through downloads on peer-to-peer online music networks.

 

Last year, high-profile releases by such groups as The Strokes, The Flaming Lips and The Red Hot Chili Peppers were available illegally online weeks before their launch.

 

More recently, Jack White of The White Stripes gave a Chicago radio station a tongue-lashing this summer for playing his new album, "Icky Thump," three weeks before its release date. The album showed up on various file-sharing sites later that day.

 

Record companies say such leaks damage sales, and they're cracking down on a key source of prerelease piracy: the media.

 

Labels are beefing up security by using new encryption and digital watermarking technologies on promotional copies, making it possible to track down the source of unauthorized copies. They also are turning to services such as Web Sheriff or MediaDefender, which aggressively surf the Web for leaked digital copies of music, movies and other copyright-protected content.

 

When content is found, these companies seek to take it down, or in the case of MediaDefender, flood the Web with bogus or "spoof" MP3 files that have the same name as the music but are empty. On the peer-to-peer networks notorious for pirated copies of music, fans who want a given recording may have to sift through countless bogus files before finding the real thing.

 

"We create a 'needle-in-the-haystack' for people who want the music," said Randy Saaf, MediaDefender's chief executive. "When the stuff gets out there, it's our theory that you can't put the toothpaste back into the tube."

 

The new tactics are part of the battle to stop sliding music sales. Album sales -- including digital and physical copies -- have fallen 15 percent so far in 2007, according to statistics released earlier this month from Nielsen Soundscan. That is on top of a 13 percent slide in CD shipments in 2006, according to the Recording Industry Association of America, continuing a trend that saw CD shipments fall in five of the last six years.

 

Ironically, record labels are finding the promotional cycle they've long used to build buzz for a new release can backfire in the Internet age. Thousands of copies are sent to reviewers, record stations and others close to the music business months in advance of the release date to get fans interested in the music and stoke demand. But illegal album copies often are leaked well before official release dates, putting a dent in sales and, at times, forcing labels to push up an album's launch.

 

For music, "every major release can be found on the Internet typically two to four months before the label intends to release an album," said John Giacobbi, managing director and founder of Web Sheriff Ltd. "It can get out of hand very quickly and cut sales in half."

 

"For any release that is expected to sell over 8,000 copies, we'll usually find a CD for sale [on eBay] before the release date," said Nan Warshaw, a co-owner of Chicago's Bloodshot Records. "Most likely they are from media reviewers."

 

Sometimes, the artist speaks up.

 

On May 30, three weeks before the June 19 release of the White Stripes' "Icky Thump" album, Chicago radio station WKQX-FM 101.1, known as Q101, played the entire album on the air without approvals from the band's label, Warner Bros. Records, or the band.

 

"That was the original leak of the album," Giacobbi said. "Word got around of this pretty quickly and then everyone started to rip the stream."

 

Some listeners who heard the broadcast started making copies, one of which made it to the Swedish peer-to-peer Web site The Pirate Bay, where fans could download the "Q101 radio rip" of "Icky Thump."

 

The quality was poor, but lead singer Jack White was so irate at the radio leak that he called from a tour in Spain "looking specifically for me, to yell at me for leaking the album," wrote Electra, the Q101 disc jockey who played the album during her show, on her blog.

 

When White called, her show was off the air so she took the call with two other deejays. The conversation happened off the air.

 

"We tried to explain where we were coming from -- someone gave us a copy of a record that we were really excited to play, and the whole experience was an hourlong lovefest for him and his band -- but he wasn't having it," Electra wrote. "He hung up, very, very angry and I thought I was going to cry."

 

The leaked copy came from someone associated with the record, said Marv Nyren, the regional vice president and general manager in Chicago for Emmis Communications, which owns the stations. The person with the album told the station that a few songs already were being played in Europe.

 

"We told the label we had a copy of the album," Nyren said, "and that we would like to play it once." The label said they didn't really want the station to play the album, but we "don't think we'll send you a cease-and-desist order" if you do, Nyren said.

 

So the station was under the impression that it would be OK if it played the album, just once.

 

"Radio stations have been doing this for 50 years. We get music in advance and we play it," he said. "Many labels say they'll send it to us because they want us to play the [music]. We never, ever try to hurt an artist. It doesn't do me any good to have Jack White mad at us."

 

Warner Bros. could not be reached for comment.

 

Although many people on the Web speculated that the episode was a stunt to promote the album, it was not, and the station apologized to White and the record label.

 

Bloodshot's Warshaw understands why White was angry.

 

"It was not supposed to happen," she said. "It was something beyond his control."

 

That is the main reason why labels want to slow the prerelease piracy, because it takes control out of their hands.

 

"After the release date, it's about educating fans," she said. "By stealing a CD [getting it from a friend or on a peer-to-peer network], it's taking money out of the band's hands.

 

"But prerelease, it's about leaking material. You can try to control it," she said.

 

One way Bloodshot is trying to control the problem is by limiting the number of tracks reviewers receive of certain recordings. Instead of sending the entire album, the label will distribute two MP3s to reviewers. Other reviewers still receive a CD, but if they are found to be selling prerelease discs at sites such as eBay, Bloodshot removes them from its lists.

 

Giacobbi, with Web Sheriff, says many CDs sent to reviewers can be traced. Some recordings could have a special watermark; others, a certain digital code.

 

"We terminate dozens of auctions on eBay every day," he said of his 20-person team that constantly monitors the Internet for violations. "And then we try to get information on the seller and go after them."

 

Web Sheriff works with dozens of labels in the U.S. and the United Kingdom.

 

For a digital leak, it can track which Internet service provider was used for sending music files to a peer-to-peer network. It sends a note to the ISP, which then can then notify the computer user they are engaging in illegal activity.

 

Each computer's Web connection has a unique Internet protocol address.

 

"The ISPs usually always cooperate," Giacobbi said.

 

But Saaf, whose MediaDefender floods the Web with bogus files, said the take-down approach only goes so far.

 

"You really can't take it down once it's out there. It can spread quickly," he said. "So we try to put up some speed bumps to slow it down."

 

----------

 

ebenderoff@tribune.com

 

 

Copyright

[Chendizzle]

If anyone here frequens the music section over at ateaseweb.com, they know well the Web Sheriff/Mr. Giacobbi.

[W(TF)]

When I was a teen, me and everyone I knew had an FM tuner and a cassette deck.

 

Plus ca change, eh... So what's the BFD? If the music's good people will buy it!

[stooka]

When I was a teen, me and everyone I knew had an FM tuner and a cassette deck.

 

Plus ca change, eh... So what's the BFD? If the music's good people will buy it!

 

 

reflecting back to the countless hours spent taping King Biscuit live performances off the radio.

[Marijn]

I haven't had time to read the article yet, but I have to say that Jagjaguwar has done a fantastic job concerning the new Okkervil River-album. Only days after it had leaked, they announced that there will be a limited edition of the album, including a bonus-disc with Will Sheff's demo-recordings. I ordered it last week, and exactly one day after my order confirmation, I received an e-mail from Jagjaguwar with a link to pick up a digital (legal) copy of the album.

 

Now th

[mountain bed]

reflecting back to the countless hours spent taping King Biscuit live performances off the radio.

[deepseacatfish]

So what's the BFD? If the music's good people will buy it!

I think partially it's artists/labels feeling like they have a lack of control over their product these days. If everything leaks early, is available for high-quality download illegally, and sold by second parties who didn't buy it, but instead got it as a promo then I think that could definitely be frustrating as an artist.

 

Also, it's pretty clear that even with "good" music there is a loss in sales to downloads, etc. It's been discussed before around here in regards to the small label Suburban Home Records, but I thought that provided pretty convincing evidence of actual monetary losses regarding downloading, etc.

 

 

That said, I think the approach to making things legally available for download (or stream) and combating sales losses by trying to make albums more appealing (ie. bonus cd's, dvd's, access to tracks/extra material, packaging vinyl with mp3's or cd's, etc.) is a decent way to try and make the product more appealing...but I think artists will definitely have to rely on touring as a main revenue source and use the internet as the promotional tool that it can be. Anybody who thinks that the internet and downloading is or will kill music/rock/etc. is off, but it certainly has drastically changed the market.

[W(TF)]

I think artists who take an adversarial position with their own fans are plain stoopid. They've been bought and sold by the suits, and no longer work for themselves. Maybe they were always just in it for the money.

 

Music must remain free!

[EL the Famous]

I think artists who take an adversarial position with their own fans are plain stoopid. They've been bought and sold by the suits, and no longer work for themselves. Maybe they were always just in it for the money.

 

Music must remain free!

 

[renic]

but it wasn't made for free.

[MrRain422]

Artists generally make most of their money from touring anyway. Once a band is well established and is guaranteed to move a lot of units, then the record label will give them some big money, but most bands make very little from record sales (at least on major labels -- this is the case on some indies too, although that sort of thing can differ quite a bit between indie labels, as they're all run pretty differently).

 

That being said, I can certainly understand why an artist who has toiled over their work doesn't appreciate people downloading their music for free, especially in cases where they paid to make the record themselves. In those cases, yeah, those artists are losing money directly, and have every right to be angry about it. The thing is, the internet is a reality, it is a force in music, and it is not going to go away. As frustrating as it may be, no artist can survive nowadays without the internet. They need to embrace it and learn to use it to their benefit rather than trying to fight it. And there have been many instances of bands who have learned to do so effectively. Resisting it will only serve to alienate more fans and hurt their bottom line even more.

[Synthesizer Patel]

I heard that if illegal music downloading were to suddenly disappear over night, then the quality of music would go up by over 200% of its current quality; because artists will regain the impetuous to make good music again. And, if you ask any band or solo artist, they just don't have the will power to give their all when they know for a fact that some people won't actually be paying for their music. This is true, isn't it? Otherwise why else should we be giving a monkey bollock about the situation? I can think of lots of other professions that get shafted in regard to what they input in to their jobs compared to what they get out of it before musicians make me shed a tear. Perhaps if people had more disposable income then they'd be buying more music rather than downloading it for free, who knows.

[anodyne]

the article's focus was on promo copies. I used to get tons of promos when i worked as a buyer for an RIAA member distro. it was a cool job that allowed me to rub elbows with some of my entertainment heroes, but paid very little. anyway, one of the big compensations for the low pay was tons of free records (that were legal, paid for by the bands contractually and sent by the labels). twice a year i'd go to the used record store and cash in the 500+ cds, tapes and occasional records (this was back in 1996) and get my couple hundred bucks. very rarely did a promo do what it was meant to -- actually promote the album. 99% of what we bought was based on charts and buzz in industry rags, not the actual sounds on the tape. the few times i stuck my neck out and bought based on whether an album was good or not kind of screwed me (Jawbreaker's DEAR YOU going for $50 a disc on ebay a few years ago was really bitter considering how many cases we were stuck with). The cost of making records would drop if the promotional copies dried up.

 

 

an aside - some GREAT records get shelved by labels after the promotional copy is sent out. there was a record by Sensefield that was probably the best thing they ever did. They signed to warners and got lost in the shuffle. their release date was pushed back 3 times before the album was finally dropped. the band couldn't afford the $300,000 to buy the tapes and release it themselves, so they re-recorded it. the songs had been "improved upon" in the new versions and the much delayed, re-recorded disc kinda sucked. the original warner promo was lost on industry insiders who likely couldn't give two shits about it. strangely, i didn't get sent a copy of that disc, but i bought it on ebay before it was supposed to release for $5 (shipping included).

[Vacant Horizon]

I agree with the earlier post that the internet is here to stay and artists etc. need to use it to their advantage. for example, invest in their own download service at their website. if all artists were doing this, there would be no more 'record' companies.

 

the thought that artists aren't 'giving it their all' b/c no one's gonna buy is both sad and kind of ridiculous. hell, i write and work on songs all the time b/c i am compelled by the total aspect of creation. no one is prolly ever gonna hear my tunes, but i still create. if bands are putting out shitty music then it's shitty music that people wont buy. we download the album and if it sux we don't buy it. this is the cause of the loss of revenue with the companies. for decades music consumers have gotten screwed by buying an album assuming it would be good only to find that it blows and they are out $$. Again, that is the loss of revenue. 99% of the crap people download is stuff they would never buy in the first place. so it's really no loss from the internet.

c

[owl]

I'm surprised that they are still sending advance copies. When you think that 1) it will definitely get your album leaked, and 2) reviews go up almost immediately anyway, nowadays, I can't see the point in sending advance copies. From a record company perspective, it seems like a relatively sane thing to do.

[EL the Famous]

hell, i write and work on songs all the time b/c i am compelled by the total aspect of creation. no one is prolly ever gonna hear my tunes, but i still create.

 

great, but are you a career musician who has no other streams of revenue?

[Synthesizer Patel]

great, but are you a career musician who has no other streams of revenue?

 

in china they have these sweat shops where they get all these musicians to churn out song after song with little pay and even less in the way of a 'lunch break'! apparently they are run by illegal downloaders. it's not like in the old days when musicians were paid in gold bars - even the lowliest mountain man wouldn't pick up a banjo without first dining on swans neck as motivation for his art.

 

one of my favourite albums of recent years is lambchop's nixon - kurt wagner, the leader of the band, seemed to find time to make that whilst being a floor fitter. so, as my old man would say, "go get a job!" which is a crude way of looking at it, but when record labels make it black and white it's hard not to follow suit.

[LouieB]

I only have two short things to say on this....

 

1. Countless bootleg LPs were produced from shows broadcast over the radio.

2. I have bought countless review copies of CDs over the years from folks who dumped them at used record stores.

 

So it goes....

 

LouieB

[EL the Famous]

in china they have these sweat shops where they get all these musicians to churn out song after song with little pay and even less in the way of a 'lunch break'! apparently they are run by illegal downloaders. it's not like in the old days when musicians were paid in gold bars - even the lowliest mountain man wouldn't pick up a banjo without first dining on swans neck as motivation for his art.

 

one of my favourite albums of recent years is lambchop's nixon - kurt wagner, the leader of the band, seemed to find time to make that whilst being a floor fitter. so, as my old man would say, "go get a job!" which is a crude way of looking at it, but when record labels make it black and white it's hard not to follow suit.

 

is your point they should just 'suck it up and get another job'? i'm not following. i'm not defending the labels need to release bloated albums full of crappy songs by crappy artists, but I can totally see why they would do away w/ advance copies...finding them in used CD stores is one thing, prolific spread via the web is another. to say that the practice of this doesn't account for some amount of lost revenue is ludicrous.

[mountain bed]

This has little if anything to do with studio recordings (and the revenue they generate) but I think one of the best things to come from the music industry lately is offering fans that go to live shows the opportunity to purchase soundboard-quality cds of the show they've just witnessed. It's great for the fans, but it's also good for the bands in that it supplements their touring income.

 

Pearl Jam, Phil Lesh & others have successfully used this. Many tour-heavy bands would do well to follow the example imo.

[Synthesizer Patel]

is your point they should just 'suck it up and get another job'? i'm not following. i'm not defending the labels need to release bloated albums full of crappy songs by crappy artists, but I can totally see why they would do away w/ advance copies...finding them in used CD stores is one thing, prolific spread via the web is another. to say that the practice of this doesn't account for some amount of lost revenue is ludicrous.

 

my point is that if they don't make enough money to live on whilst making music then they should work another job at the same time. if they are touring then they are making enough money to live on, it might not be enough money to retire at 30, but why should they have it any different than 90% of the rest of us? we aren't talking about slave labour, is my point; exactly how many musicians have starved to death recently? - this needs to be put into perspective, and also remember that this is about the record companies more than the artists, and the big record companies at that.

 

by the way, the figures seem to be referring mainly to CD shipments rather than all music sales, although it does mention digital sales in this rather confusing sentence:

 

"Album sales -- including digital and physical copies -- have fallen 15 percent so far in 2007, according to statistics released earlier this month from Nielsen Soundscan. That is on top of a 13 percent slide in CD shipments in 2006, according to the Recording Industry Association of America, continuing a trend that saw CD shipments fall in five of the last six years."

 

if it was that cut and dry, then the sentence above would surely be a little more straight-forward, wouldn't it?

 

and, to say that the practice of illegal downloading doesn't account for some amount of gained revenue is ludicrous too. thanks to free exposure (which, certainly, small record labels, at the very least, are unable to provide with their budgets)