File Sharing May Be Illegal; But Labels Now Selling Ads in Files

From the WSJ:


“But now there’s a growing recognition among some record executives and performers that the people who are downloading illegally are frequently huge music fans and that marketing to them may be more desirable in the long run than suing or otherwise harassing them.Hence the alliance between Jay-Z and Coke. By inserting promotional material into the decoy files, and then planting those files prominently on file-sharing sites, record labels and other marketers can turn what is now an antipiracy tool into an advertising medium. ‘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.’”

It’s a funny logic: We still may sue them, but we admit they are our best customers.

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