Tuesday, March 11, 2008

Piracy as Marketing! Finish Them!!!

How Piracy Will Save the Music Industry in a nutshell… sort of.

Jason Schwartz of Angelsoft records.

He described a clandestine Fight Club type group called “The Scene” who are responsible for the best quality and first released pirated content.

These are people who are deeply embedded within the entertainment system.

According to Schwarts, the Scene is comprised of multiple release groups that focus on specific media and genres. Each release group is five people who don’t know each other. Very secret. Assembly line type systems.

First person- content; steals the original physical or digital content

Second- ripper

Third- encoder

Fourth- packer

The ultimate goal is to work faster than the other groups.

They encode NFO files.

These include info about the release and “brand” of the release group. 

Why? It’s a game

1.  who can release first among the groups

2.  beat the record companies

3.  prestige- geek prestige

4.  access to top sites


The pirated material disseminates like this:

The scene> to top sites (holy grail of content)>private bit torrent sites (invite only)>public bit torrent>peer to peer networks.

What Schwartz proposes, is that record companies willing release their material into the piracy loop. He says they should release just as high quality material as The Scene.

He then states that the record companies should add a “ChipIn” file to take donations. He referenced Radiohead’s pay what you want experiment.

He said that the ID3 tags should be well taken care of. In the comments section of the ID3 tag add the donation info.

He also suggest labels should spend time on the album art and embed the album art in the mp3s and add the donation info to album art.

Labels should then:

Upload to torrent sites

Speed the torrent

Strip out the IPs from the tag

Map out the IPs. 

From the mapped out IPs the labels can plan more strategic tours and then when booking venues, labels can point to local area listener data.

Randy Saaf is the CEO of MediaDefender Inc.

He was not very popular.

His group is trying to reach the people who will not buy records. His approach is to push advertising on the Peer to Peer networks. He does this by substituting the album art with a brand logo.

He says that to advertisers, downloaders are a great demographic: young and tech savvy.

“It’s a win-win situation.” Downloader gets content- record company gets paid- advertiser gets demographic exposure.

His group is also responsible for pushing out the fake files. They flood the networks with these fake file and then allow the advertiser backed files to get to the top.

“Advertising in album art and flooding fake files” was not popular among the audience.

People were much more responsive to Schwartz’s idea of forward thinking in piracy.

Saaf- $.99 is a fair price point

Schwartz- “I don’t think $.99 is a fair price point

Audience agrees.

The Q&A got a bit tense as lawyers and over zealous reporters hit Saaf hard and heavy.

Schwartz went into a “piracy as boycott” theory. He suggested solving this by involving a monthly fee for downloading and applying an Economy of Attention model for revenue dispersement in which the artists/labels would get a percentage of revenue based on their downloads.

Schwartz also encouraged the idea of labels providing music blogs with free MP3s and permission to post for download on the sites.

The panel ended on a downer as an artists’ lawyer “from D.C.” who showed much annoyance while waiting in line, attempted to hijack the panel, tout her own opinions, plug her music panel for Wednesday and to the panelists’ annoyance, never ask a question.





Irene said...

When Radiohead tried to give me their album for free I didn't take them up on it- but a guy in my office offered me his copy to burn a few days later- and heck yeah I did! - some people just won't cooperate (who me?), even if it's for free stuff

Jason C said...

I think a lot of this is all Schwartz is a bit to optimistic. He is essentially discussing the Darknet, and that ground was already covered back in 2002 or so when torrents were first becoming popular (Click if anyone cares to read the first real discussion of the phenomenon), so none of that was particularly new information on his part. The idea about mapping IPs to better target tours is, to me, a little absurd if you understand the labels side. In general (there have been inroads into tour proceeds), the labels don't make money off of touring. The only reason they care about the tour is, traditionally, tours sell albums. If they are giving the albums away, they have no reason to give a damn about the tour. They don't make their money there.

The "record" part of record companies is there for a reason. They make recordings and sell them. That is a huge part of how they make their money, a part that they can't afford to lose at the moment. They are also not going to spend even more money on making things they are going to give away.

It's not that I am arguing for labels to exist and us to feel sorry. It just seems to me that Schwartz is trying to justify record companies existing while he is also describing an environment where they can't. Publishing firms or other concerns that produce profit from copyright exploitation could probably do well under this system as they could learn to better exploit other income streams available to them. In fact, were Schwartz's model to be put in place, record labels would be better off to just become copyright labels and forget recording all together.

Scott Barrus said...

This is such an informative post on the subculture of "pirate" groups. The progression of how media is released, or pirated, is as how I thought it was. Someone from inside the record label or movie studio =, like a intern or engineer tech, would steal the CD or DVD, rip it, encode it, then pack it. I think that the best way to beat these "pirates" is to beat them at their own game, much like Schwarz has said. Even if this may end up hurting them, the buzz created around a leak may be much more beneficial then expected. A lot of music fans nowadays want to "preview" the CD they may purchase.

Saaf- $.99 is a fair price point

Schwartz- “I don’t think $.99 is a fair price point."

I agree with this strongly. If Apple were to implement $.50 songs and $5.99 albums they would sell way more songs and garner more attention then they already have. In due time, I believe this will happen.