Wednesday, April 30, 2008

Labels mull release strategies in age of piracy

It used to be so easy. When the entertainment industry had control over its distribution, back before piracy set in, there was this notion of a "release window."

It allowed the film industry to rake in billions by carefully orchestrating exactly where its content was consumed and via what format. Movies appeared first in theaters, then on home video, premium cable and finally network TV, with domestic and international releases interspersed among them.

It's something the music industry has long hoped to replicate. But in a sort of cosmic joke, the dawn of digital entertainment gave the music industry a host of new products to sell beyond the CD -- such as ringtones, ringback tones, videogame downloads and digital downloads -- and digital piracy to render the "windowing" effort powerless.

"In a perfect world, we would be able to execute more of a windowing strategy," says Jeff Dodes, senior VP of marketing and digital media at Zomba/Jive Records. "But (when) we plan a strategy and then the track leaks . . . what strategy do we really have? That happens to us fairly often."

Once a track leaks, that's it. No more control. The result? Everyone scrambles to make money where they can, as fast as they can, on whatever format holds the most potential at the time. That's what led urban pop duo Gnarls Barkley and rock group the Raconteurs to rush-release albums in physical and digital formats rather than build demand with an early single.

But that doesn't stop the industry from trying. Despite the chaos, there are islands of sanity where a savvy label can still manage the staged release of music.

"Some things are more controllable than other things," Jupiter Research music analyst David Card says.

Take CDs. The physical release is one of the few music products that is solely under the label's control; in some cases staggering a physical album's release after its digital debut can help regain some lost ground. Radiohead found success debuting its "In Rainbows" album as a digital download months before releasing the physical CD, and the latter still became a No. 1 seller. Many indie and emerging acts are following similar strategies. Even Columbia Records is embracing the concept with the release of U.K. songwriter Adele's U.S. debut,"19."

Things get tricker with digital products, particularly downloads. Conventional wisdom says that barring the occasional iTunes exclusive, the best bet is to make the album available everywhere the moment the first single is serviced to radio.

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