October 19, 2006

Yesterday the Wall Street Journal ran an article on the alliance betweeen Jay-Z and Coca-Cola that puts promotional material in pirated tracks that are passed around P2P networks.

"By inserting promotional material into the decoy files, and then planting those files prominently on file-sharing sites, record labels and other marketers can turn what is now an antipiracy tool into an advertising medium. 'The concept here is making the peer-to-peer networks work for us,' says Jay-Z's attorney, Michael Guido. 'While peer-to-peer users are stealing the intellectual property, they are also the active music audience,' and "this technology allows us to market back to them.'"

This may have people scratching their heads and wondering how labels -- and sponsors -- can use piracy with one hand while they're fighting piracy with the other. Look no further than labels' embrace of -- nay, reliance upon -- (technically illegal) mixtapes to promote their hip hop artists.

It's not just Universal, which did a similar piracy campaign with Ne-Yo. Virgin Records acknowledged it is in talks with MediaDefender "about marketing options. "It's an opportunity that will hopefully lead to a better experience for the artists, the labels and the consumers," said Jason Flom.

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Posted by Glenn at 10:13 AM | | | EMI | P2P | Piracy | Universal Music Group