February 22, 2007

Jeff Leeds reported recently on a move by Universal Music Group's Suretone Records to put its videos -- free of charge - on popular file-sharing networks. Sort of. Suretone is just being a big tease.

"Unlike the song and music video files that major labels sell at services like iTunes, the video files will not be wrapped in protective software to limit copying, executives say. .... But the files will also be incomplete: users who download them will see perhaps half the video and be directed to watch the complete version at the label's own Web site, which will sell advertising to run alongside its videos."

There are two themes here. The first is the video's transformation from a promotional vehicle to a direct (and indirect in this case) revenue stream. Once given away for free -- in order to sell albums -- videos are now being asked to hold up sagging bottom lines. Suretune is trying to both promote (via seeding) and generate revenue (through advertising). The other theme is that of the label as a direct-to-consumer entity. Traditionally, labels have been at least one degree of separation from the consumer (iTunes and Target, for example, actually sell the music, and there may be a distributor between retailer and label). Recently, labels have pondered how to eliminate the middle man and connect directly with fans. Suretone's model is to both lure (for ad dollars) and entertain (for eventual music sales).

It's the luring aspect that bothers me. (Sorry to use a word with such negative connotations, but it's the proper word here.) Labels should resist the urge to adopt any marketing strategy that can result in additional consumer frustration. With RIAA lawsuits and DRM casting an increasingly black cloud on consumer sentiment, labels would be wise to play nice for the time being. If CD sales were up 20% rather than down 20%, I'd say, "Sure, tease the kids with incomplete videos. Times are good." But they're not good, are they?

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Posted by Glenn at 5:51 PM | | | P2P | Universal Music Group