For years, major music labels have waged a doomed war against file sharing in the hope lawsuits and secretly corrupted files would convince the millions who download music illegally to return to the record store.
But new relationships between music companies, advertisers and file-sharing networks are signalling a major change in the corporate attitude toward illegal downloads. Instead of trying in vain to stop a trend that has spread like wildfire, record giants have finally figured out that when it comes to music piracy, if you can’t beat ‘em, join ‘em.
“What you’re seeing is a shift in the business model of how music gets paid for,” said Kaan Yigit, president of Solutions Research Group Consultants Inc., a Toronto-based market research firm. “When an industry sees its fortunes sagging for whatever reason, they will look for other avenues to bolster their revenue streams. It’s as simple as that.” That means many record labels are planning to let users download their content for free in exchange for putting advertisements, sponsorships or promotional offers in audio and video files and on peer-to-peer networks such as Grokster or Limewire.
Instead of watching as file sharing and illegal downloads continue to eat up their profits, many labels have decided to focus on the tremendous advertising opportunities that exist on peer-to-peer networks, which are visited by millions of people a day. It’s a phenomenon many experts agree will be the new landscape of music in the next few years.
“(In the) last six months to a year, you’re seeing a lot more aggressive plays by various record labels to become part of basically what is obviously a digital revolution,” said Yigit.
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