Putting the Ad to the Music - Why Digital Payloads and MP3.com Are Doing It

By Michele Wilson-Morris (more articles from this author) 2000-07-18

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The next time you download a music file from the Internet, you might be surprised at what you hear. Companies like Digital Payloads and MP3.com are beginning to use downloaded music files as the next tool in marketing and promotions. This is a trend that will no doubt continue as more and more labels and content providers seek ways to promote their music and maximize revenues.

On July 10th, Los Angeles based Digital Payloads, Inc. distributed a press release which announced their patent-pending solution that allows content providers to distribute free MP3 music files on the Internet. The technology behind it is called Payloads. According to John Brewer, co-founder of Digital Payloads along with partner Jeff Zamora, a Payload "is essentially an Internet version of an interactive CD track. As the music is playing, the user gets an interactive experience. All of the files we use are standard MP3 files that have interactive content imbedded into them that either the record label or sponsor wants communicated to the listener. Since the music is licensed, that translates into revenue for the artists and labels. Payloads are basically a promotional track for new releases."

The technology seems to be pretty simple, but effective. On the front end, record labels (and sometimes sponsors) want to utilize the consumer download as a mechanism of providing additional information about the label or artist to increase sales. Digital Payloads helps them accomplish this by taking the message that the labels and artists want to get across and embedding it on the front end directly into the track. Not at the beginning or end, but as the track plays. The end result is similar to a DJ announcing a song or making a comment about it as it comes on. The message plays then quickly ends and the consumer is left with the music. The type of message being added is usually the artist's name and the name of the record label. After all, if you're listening to a song that you really like, what better way to entice you to purchase it than to remind you who it is that's singing it and what label they're on? Additionally, if you're online at the time the song is playing, a link pops up that allows you to make the purchase immediately. And the skin on your player will change to something that is related to the artist and/or song - for example, the skin might become the CD cover of the track that you're listening to.

According to the press release issued by Digital Payloads, its technology "provides artists and record labels with revenue and other promotional benefits. By enabling the compensation of artists for their intellectual property, Digital Payloads encourages free distribution of these licensed music files via popular Internet media exchanges such as Napster, Gnutella, Scour.com and others." Peter Babos, a Digital Payloads spokesperson commented, "The explosive phenomenon of exchanging MP3 music can now be leveraged as a vehicle for promoting artists and labels/advertisers. Fans want free music, and Payloads correctly address a missing element of what, up until now, has been an unresolvable legal war. Our Payload technology and business model successfully transitions the promotion of music, film, and publishing content from brick ad mortar to the digital world. Other technologies that attempt to protect revenue streams, such as copyright protection, pay-to-play, and subscriptions to streaming media are unwieldy, and fail to exploit the free media phenomenon as it exists today. Internet users will bypass or hack their way past these schemes. As long as media producers create ‘hard media' such as CDs, people will continue to find ways to capture and share the files for personal use on a wide variety of players and mobile devices. Our Payloads are a universal solution for leveraging the free music phenomena that can be accepted by record labels, artists, advertisers and consumers."

"We're all in the same game of providing licensed music to fans, but Digital Payloads is in the promotional step of the chain," stated Mr. Brewer.

Payloads technology is compatible with popular MP3 players, including WinAmp, MusicMatch, Sonique and Windows Media Player.

In related news, MP3.com recently announced its affiliation with AdAce, Inc., which offers targeted advertising services to online businesses. According to a press release issued on July 6th, MP3.com entered into the agreement "to create new revenue possibilities for all labels and artists. The partnership creates new advertising and promotional opportunities for content owners who can now take advantage of automated advertising technologies that were not readily available, due to technological innovations."

Per Michael Robertson, MP3.com's Chairman and Chief Executive Promoter, "Content owners are constantly turning to us for ways to actively promote their music in a cost-efficient manner. And while we have never been a content promoter, we understand the significance of making the promotional and marketing technologies available, so that content owners have the opportunity to make more money. That's why this alliance with AdAce is so important. By following a few simple steps, state-of-the-art promotional and marketing tools can be affordably and effectively used by content owners who want to maximize their exposure and their revenue. Whether its through the sale of CDs, selling tickets to concerts, or debuting a new band, we believe this technology is going to open revenue opportunities that were not possible before."

Record labels utilizing MP3.com's site to post their music will have access to the AdAce technology, which uses banner storage, campaign reporting statistics and automated billing. Content owners can easily advertise by uploading their existing banners or using AdAce's Ad-O-Matic banner creator, which is a point and click system.

"These marketing and promotional tools, used in conjunction with other revenue opportunities such as subscription or Payback for Playback solutions offer a complete suite of services designed to establish and maintain a potentially profitable online presence," said Robertson.

So what will consumers think about these promotional concepts? There will likely be a variety of reactions - some won't care at all, others will be annoyed to one degree or another and view it as an intrusion, and still others will see it as a small price to pay for free music. Where the percentages will fall for each of these reactions when all and said and done will be the interesting part.

Linkography

Digital Payloads - www.digitalpayloads.com
MP3.com - www.mp3.com
AdAce - www.adace.com
Napster - www.napster.com
Gnutella - http://gnutella.wego.com
Sour.com - www.scour.com

Related MusicDish e-Journal Articles:
» Music as a Service: Michael Robertson at EAT'M (2000-06-14)
» MP3.com Settles With Major Record Labels - Two Down – Three To Go (2000-06-13)

Related News from Mi2N:
» MP3.COM REACHES 500,000 SONG MILESTONE
» Statement Of Michael Robertson Chairman And Chief Executive Officer MP3.com, Inc.On "The Future Of Digital Music: Is There An Upside To Downloading?"
» Digital Payloads Drops Bombshell On Internet Music Wars
» MP3.COM AGREEMENT WITH ADACE COULD MEAN BANNER DAYS FOR CONTENT OWNERS
» MP3.COM LAUNCHES DIGITAL SUBSCRIPTION CHANNEL PROGRAM FOR ARTISTS

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