RIAA Using P2P Networks for Advertising?

In a growing recognition that file-sharers are oftentimes huge music fans, record execs and performers are starting to put real clips in their infamous decoys on P2P networks.

I think almost everyone has downloaded a fake movie or music file at least once in their life. Who can forget a 200MB Lord of the Rings copy or a hiss-infested MP3?

Decoys have been a longtime tactic in the defense “plans” of the music industry, and now they are being retooled to harness the power of the feared P2P networks.

Realizing that it’s probably not the best approach in the world to anger loyal listeners, evident by their fervent downloading of an artists’s music, record execs and performers are devising a middle path of sorts. They have begun to put promotional material into the decoy files and then sprinkle the files across the P2P networks for people to download. “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.”

Jay-Z, at the request of Coca-Cola, is among the first to agree to allow such P2P distribution. His “decoy” contains an eight-minute concert outtake clip mixed in with a promotion for Coca-Cola of course.

The Wall Street Journal writes:

Right now, only about 1% of the decoy files on peer-to-peer sites include promotions or ads, but the potential audience is huge. While many well-known peer-to-peer services such as eDonkey and Grokster have been shut down by legal action, new ones pop up all the time. In September, an average of nine million people were logged on to the services at any given time, up from 6.8 million two years ago, according to BigChampagne, which tracks the industry.
The record industry’s approach toward downloaders began to change after last year’s landmark Supreme Court ruling on Grokster. The Justices found that file-sharing companies like Grokster could be held liable for copyright infringement if their products encouraged consumers to swap music or movies illegally. Before the ruling, record labels worried that they might undercut their legal arguments if they used peer-to-peer sites for their own purposes. Now, “we’re basically free to exploit these billions of fake files we’re putting out,” says Randy Saaf, chief executive of MediaDefender.

I like how the music industry realizes the power of the P2P networks yet refuses to embrace the distribution model, instead continuing on in a vague half-embrace of sorts. Only grudgingly do they allow Jobs to sling their wares on iTunes, and every service any of them has ever attempted to bring online has been DRM infested or user unfriendly. Exploitation seems to still be their operative word, be it the artists who get locked into 9 album deals or the consumers who have to pay 20 bucks for an album with maybe 2 decent songs on it.

Meanwhile back at the ranch, the music industry’s opponent in all of this, the P2P networks, are fighting back against these decoy ads. New versions of Limewire, for instance, “…won’t allow people responding to other users’ searches to easily include a link to a Web page.” Nice to see somebody has our back in all of this.

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