Old EMI Email Shows They Knew That Giving Away Songs For Free Leads To More Sales

from the well-look-at-that dept

Tue, Jan 22nd 2013 8:27am — Mike Masnick

We already wrote about the recent filing in the EMI v. MP3Tunes case, in which Michael Robertson shows that (contrary to EMI's statements to the court) EMI regularly promoted its music by giving out free MP3s. However, I wanted to do a separate post looking at one specific email highlighted in the filing. It shows an email from 2008 from Stephen Gullberg, an employee of EMI Publishing, talking about marketing plans involving giving away free MP3 downloads. I've bolded the parts that struck me as particularly interesting. Gullberg is emailing with a counterpart at EMI:

Free Promotional MP3 of one song to the public for free download from Peter Moréns album (as do most indie labels). They would offer "Social Competence" for free download on touchandgorecords.com, Peter and Touch and Go's Myspace pages, plus encourage as many third party online zines, podcasts, blogs, major web portals to host the MP3 for free download on their site. We are being told that historically the track which is offered for free like this is usually still the top selling track in digital retail. They would like to offer this promotional MP3 download for nine months. After that initially period the promotional partners will replace the MP3 download with a stream for the duration of the license of the album including offering a stream of the song on their website and on their Myspace page and Peter's Myspace page, or until they decide to ask these partners to remove the stream.

The label has given us a further explanation of why they pursue this strategy. One promotional MP3 per album is the best way they can virally promote the album which will increase sales and thus revenue on the compositional side as well as the master recording side. This promotional technique has proven to be so effective, that virtually every free track they have issued from an album has maintained itself as the top selling track from the album. It also enables them to offer something from the album to the myriad of sites, blogs, podcasts out there that would be tempted to give away unauthorized materials, perhaps the entire album, if they do not have the option to feature a track that they offer to them. This control mechanism is vital to their methods of slowing piracy of albums.

And yet, all this time, the RIAA keeps insisting that free music is a problem? Even as employees at the labels knew years ago that free was "so effective" as a promotional technique that it helped sell the same track much more.

Gullberg Email (PDF)Gullberg Email (Text)

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Filed Under: michael robertson, mp3, stephen gullberg
Companies: emi, mp3tunes

36 Comments

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Aria Company (profile), 22 Jan 2013 @ 7:05am

Indeed. Common sense is also free, but those at the MPAA and RIAA clearly prevent using it as well.
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Ninja (profile), 22 Jan 2013 @ 7:16am

Re:
I think it goes beyond common sense. There are studies that show file sharing has no negative effect on how much musicians earn. I'll concede they never deal with external factors well enough but most of the ones I saw pointing at that direction are AT LEAST based on reality and not the total lunacy produced by the MAFIAA.
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jameshogg (profile), 22 Jan 2013 @ 8:35am

*Ducks incoming DMCA notices on this EMI email*.
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Anonymous Coward, 22 Jan 2013 @ 9:15am

but, but, but piracy!!!!!

the labels know exactly what they should do, just as they knew then! they have never been interested in anything exact keeping control. i still find it so hard to understand why it is that politicians haven't yet had to admit that they need to stop backing the ever more increasing demands of the entertainment industries and that 'protecting the artists' bullshit is exactly that, bullshit!!
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Anonymous Coward, 22 Jan 2013 @ 9:18am

You sound like rationality has got anything to do with it.

It was never about sales, it has always been about control.
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Zakida Paul (profile), 22 Jan 2013 @ 9:22am

It is common sense. You would be amazed at the number of artists and bands who give away one or two songs to promote an upcoming album.

Quite a high profile one is Joe Bonamassa who, last year, gave away the title song from the album Driving Towards the Daylight a month or so before the album came out.

The Pixies not long ago gave away free copies of 4 songs performed live.

There is a new band called Snakecharmer who also gave away snippets from their upcoming album just this month.

These are just a few examples of how artists can use giveaways as a promotional tool and make a nice living.
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Anonymous Coward, 22 Jan 2013 @ 9:27am

Re:
Part of the reason politicians won't admit it is because government wants more control too. They share a common goal.
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Michael, 22 Jan 2013 @ 10:24am

You missed a highlight
The part I find the most interesting is:

This control mechanism is vital to their methods of slowing piracy of albums

For all of their complaints about people sharing files causing harm, here is an email that says the exact opposite.
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Boojum (profile), 22 Jan 2013 @ 10:33am

Ehhhh... Ok. We need to apply the same critical thinking to this story (as much as we like it) as we do to the other stories that appear in techdirt and look beneath the surface.

Yes, EMI knew in certain circumstances that releasing free music can increase sales. That does not mean that releasing free music increases sales in all cases. That would require further study which doesn't seem to be referenced in this article.

Today we see studies that show at least a correlation between piracy, free releases, and increased sales, so we are looking at these emails from that perspective.

So honestly, I don't see this as an example of a smoking gun.
Boojum
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Ed C., 22 Jan 2013 @ 10:38am

Re:
Umm...they're politicians, bullshit is their business!

The entire point of the current "campaign contribution" system is for moneyed interest to pay politicians for branding and selling their bullshit to the American public.
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Anonymous Coward, 22 Jan 2013 @ 10:39am

Re:
no smoking gun, unless it's in your hand there bojangles
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gorehound (profile), 22 Jan 2013 @ 11:05am

You know something:
Fuck The MAFIAA and Fuck the Copyright Maximalists !

My wallet is Censored for life from you bloodsuckers.
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Simple Mind (profile), 22 Jan 2013 @ 11:08am

launch window
Notice in the article how they talk about releasing it for download at first, then switching that after a set time to streaming with the provision to remove the streaming. In other words, they want to have a launch window. Problem is, that isn't how the internet works. Once you put something out, it is out, there is no reigning back in. I suspect that this is the missing piece of the puzzle. Because they are unable to control windows of availability the old fogies at EMI reject the idea completely.
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Jeffrey Nonken (profile), 22 Jan 2013 @ 1:00pm

Re:
You're cherry picking.
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Anonymous Coward, 22 Jan 2013 @ 2:48pm

Re:
old news... really old, labels and artists were giving music away long before there was an interwebs, but the power of free is most effective when the artists and rights holders also have the power of choice (ie, consent).

http://thetrichordist.com/2013/01/09/free-cultures-epic-fail-if-free-is-working-why-fight-copyri ght/
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ltlw0lf (profile), 22 Jan 2013 @ 2:51pm

Re:
Quite a high profile one is Joe Bonamassa who, last year, gave away the title song from the album Driving Towards the Daylight a month or so before the album came out.

One of my favorite artists. I have all his CDs, and have gone to quite a few of his concerts here where I live. Talk about someone who gets it...he has no problems with casual tapings, and they sell USB thumb-drives with the output from the soundboard after the concert for $20. His concerts are always full, and there are always a ton of folks waiting for thumb-drives at the end of the concert.
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Anonymous Coward, 22 Jan 2013 @ 2:51pm

Re: launch window
the internet "works" or not, depending on how people chose to use it. the "internet" is not a sentient being having it's own will... so humans make technology, humans make laws, humans break laws... piracy is a human problem, not a problem with the internet.
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Anonymous Coward, 22 Jan 2013 @ 2:53pm

Re: Re:
funny thing is... if the internet is working for musicians, where is the new independent middle class of creatives and musicians? It doesn't exist... internet fail. what should have empowered artists has enslaved them to new gate keepers.

http://thetrichordist.com/2012/05/22/why-arent-more-musicians-working-professionally/
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Anonymous Coward, 22 Jan 2013 @ 4:26pm

Re: Re: launch window
If copyright enforcement actually had a track record of enforcing it against the right people, instead of suing legitimate users or innocent people, we might actually give a shit.
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MrWilson, 22 Jan 2013 @ 4:30pm

Re: Re: launch window
I agree. Copyright infringement is a human problem caused by the humans who made bad copyright laws and the humans who paid those humans to make those bad copyright laws, who are the same humans who refuse to give their customers what they want instead of accusing customers of copyright infringement, treating paying customers as if they are likely to engage in copyright infringement, and trying to pay to have more bad laws created to infringe the rights of customers, copyright infringers, and non-parties to the whole issue alike.

The technology and the internet are just the paradigm shift that has made the unethical practices of the humans who are behind these causes look even more greedy and outdated, as well as depriving them of the power they had to carry out their greedy and controlling machinations.
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MrWilson, 22 Jan 2013 @ 4:40pm

Re: Re: Re:
"if the internet is working for musicians, where is the new independent middle class of creatives and musicians? It doesn't exist... internet fail."

Sure, that might look like an internet fail if you pretend that musicians live in a magic bubble where external economic forces have no effect on them.

Where is the new independent middle class of anyone? Oh, right. The middle class is shrinking because the wealth gap is growing and the economy hasn't recovered from 2008 yet. There's still a sizable amount of unemployment amongst people who aren't working in a luxury industry.
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Anonymous Coward, 22 Jan 2013 @ 7:34pm

I don't want to be too picky but,

'free was "so effective" as a promotional technique that it helped sell the same track much more.'

Is not quite what they said.
What they said was that virtually every track made available free 'maintained' themselves as the top selling track.
Which could mean it took a sales hit, but still outperformed the other tracks, but boosted the sales of the album etc. It probably doesn't mean that, but it could, and I'm sure they'd argue it did, unless someone has the figures to prove them wrong.
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Anonymous Coward, 22 Jan 2013 @ 9:30pm

Re: Re: Re: Re:
you miss the point completely. music has never been subject to the whims of economy at large as a low ticket item looking at 36 years of data - further more, musicians saw no benefit during the economic boon of the housing bubble. so if you want to attribute this to the economy it cuts both ways, and you lose twice - double fail.
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MrWilson, 23 Jan 2013 @ 12:06am

Re: Re: Re: Re: Re:
Up until very recently, musicians pretty much had to go with a label if they wanted to make money via the touring and album selling route, so all economic impact on musicians income up until recently is through the filter of what music labels would pay artists. So 36 years of data is useless since we're talking about the new business model in which artists need labels less or not at all.

If you're looking at musicians who haven't done well in the last 10 years, you can't ignore the fact that album sales would naturally decrease with the ability for consumers to buy the one song they like instead of a whole album.

Combine that with the economic downturn in 2008 and it's not unexpected that artists aren't doing as well as they could be. Consumers have to have discretionary income in order to support luxury items. Music has always been susceptible to that market reality.
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Anonymous Coward, 23 Jan 2013 @ 2:01am

Re: Re: Re: Re: Re: Re:
actually music has not been susceptible to that market reality...

http://thetrichordist.com/2012/10/05/mythbusting-music-is-too-expensive/
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Ophelia Millais (profile), 23 Jan 2013 @ 3:52am

Re: Re:
EMI, the rights holder, who has the power of choice, is saying "the track which is offered for free like this is usually still the top selling track in digital retail." And that's despite ongoing piracy! How much "more effective" do you think it can get?
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Niall (profile), 23 Jan 2013 @ 5:13am

Re: Re: Re:
I'm sorry to hear that Shakespeare, Beethoven and da Vinci are doing so badly according to your 'ideas'.

It's also good to see that J.R.R. Tolkien, Churchill and MLK are making so much money from their creative abilities.
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Niall (profile), 23 Jan 2013 @ 5:14am

Re: Re: Re: Re: Re: Re: Re:
I am *so* glad that my work blocks your Bullshit Leavened On Garbage so I don't have to waste time and braincells reading it :)
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Niall (profile), 23 Jan 2013 @ 5:15am

Re: Re: Re: Re:
Meh, should have been after the post below this ("old news.")
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Niall (profile), 23 Jan 2013 @ 5:19am

Re:
It's called a "loss leader" and most retailers do it (think smell of coffee or bread in a food store). So taking a 'sales hit' is really a marketing cost. They specifically said that the freely available track outperformed every other track in the album, and the implication was clear that this didn't depend on it being a digital offering - that this had happened historically on analogue too.
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Anonymous Coward, 23 Jan 2013 @ 6:45am

Re: Re:
Wow, I have never heard anyone describe the smell of coffee or bread in a store as a loss leader, a loss leader is when you sell a particular product or line at a price that means you actually lose money on the deal to bring in the money that people will spend on all the other product.
It is a perfectly valid though sometimes quite destructive tactic used in analogue business.

I am not saying that taking a sales hit would be a bad thing, especially not if that one track sales hit is wiped out by the benefit to album sales etc.

I am simply pointing out that they did not say that the freely available track sold more than it would have had it not been given away for free.
It might well have done so, but they didn't say that was the case.

You said that they said
"that the freely available track outperformed every other track in the album,"
and what the article said more importantly was
'free was "so effective" as a promotional technique that it helped sell the same track much more.'

what they specifically said was
"is usually still the top selling track in digital retail.
"
and
"has maintained itself as the top selling track from the album"

That's "usually still" and "maintained"

They are quite clear that they are specifically talking about digital and make no nod or reference to analogue. But given that it has been an historic norm for them to give selected people free analogue copies without needing to have consultations, this is clearly being treated differently.

You and I might both agree that obviously if they find that giving away tracks for free boosts overall sales, of the album and other tracks, whilst having if any negative impact at all a negligible negative impact on the sales of that track, still leaving it as the top selling track then piracy and concerns about piracy are clearly meaningless.

But they are not stating at any point that sales for the tracks that have been made available for free have increased on the back of that, nor are they implying it.
Although we may well suspect that that may often be the case (and based on how radio play affects sales, almost certainly is the case)
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MrWilson, 23 Jan 2013 @ 7:45am

Re: Re: Re: Re: Re: Re: Re:
You keep citing aricles on that site as if it proves anything. Whenever I actually go through those articles and follow their links, I inevitably find a string of would-be industry insiders quoting each other but never actually presenting real evidence to support their arguments.
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Anonymous Coward, 23 Jan 2013 @ 10:29pm

Re: Re: Re: Re: Re: Re: Re: Re:
maybe listen to google's own chief economist than, Hal A Varian... or is he a would be industry insider as well?

http://thetrichordist.com/2012/05/01/effs-john-perry-barlow-is-wrong/

I love the way hal gives JPB the smackdown!
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Anonymous Coward, 23 Jan 2013 @ 10:30pm

Re: Re: Re:
alot more effective when free is not devalued by being unregulated.
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MrWilson, 24 Jan 2013 @ 11:04pm

Re: Re: Re: Re: Re: Re: Re: Re: Re:
Oooh, a Google employee citation. Since we worship at the altar of Google here, I bet that just puts us in our place, doesn't it?
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Anonymous Coward, 24 Jan 2013 @ 11:55pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
well, if the shoe fits... I'd say Hal A Varian is more than just a Google employee, he's the companies Chief Economist - you'd think he understands how these things work...

and then there's this...

http://thetrichordist.com/2013/01/24/two-simple-facts-about-technology-and-piracy-itunes-vs-yout ube/
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