Music Labels Tap Downloading Networks
The recording industry, it seems, doesn’t hate absolutely everything about illicit music downloading. Despite their legal blitzkrieg to stop online song-swapping, many music labels are benefiting from - and paying for - intelligence on the latest trends in Internet trading.
It’s a rich digital trove these recording executives are mining. By following the buzz online, they can determine where geographically to market specific artists for maximum profitability.
“The record industry has always been more about vibe and hype,” said Jeremy Welt, head of new media for Maverick Records in Los Angeles. “For the first time, we’re making decisions based on what consumers are doing and saying as opposed to just looking at radio charts.”
One company, Beverly Hills-based BigChampagne, began mining such data from popular peer-to-peer networks in 2000 and has built a thriving business selling it to recording labels.
[...] The emergence of free online trading, beginning in the late 1990s with MP3.com and the original Napster, suddenly made it technologically feasible to track music consumption in a whole new way.
“It’s the most vast and scaleable sample audience that the world has ever seen,” [BigChampagne's Eric] Garland said.
[...] Earlier this year, BigChampagne granted a sales and licensing agreement to Premier Radio Networks, whose Mediabase service tracks radio airplay. The deal fuses Mediabase’s tracking data with BigChampagne’s, giving subscribers a way to see whether airplay or radio promotions spur online music downloads or sales, Garland said.
Sales data from iTunes and other licensed music services can, of course, be in and of themselves excellent indicators of a song’s popularity.
Recall that "substantial non-infringing uses" exempts technologies that might otherwise be considered instruments of copyright infringement. It will be interesting to see whether the record company’s own use of the P2P networks for market research will ensure the upholding of the Grokster decision.
Related article from The Register: Music labels monitor P2P nets to list most popular songs; the Slashdot commentary’s title naively misses how Eric Garland’s been positioning BigChampagne for the past year: Recording Industry’s Unexpected Benefit from P2P