Record Labels Use Piracy Data to Please Fans

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It turns out that P2P is not only an enemy for the major record labels, it's also an excellent marketing research tool. In fact, MediaDefender is using piracy to help labels increase profitability.

Most people assume that record labels hate filesharing, but it seems that some companies actually use it as a research tool.

In this specific case Interscope asked MediaDefender to check whether one of “Pussycat Doll” Nicole Scherzinger‘s leaked singles is getting some traction on P2P networks. Her first single “Whatever U Like” isn’t selling well and they want to find out if pushing the track “Baby Love” is a good idea. Valuable information for them apparently, and it shows that P2P is not all bad, it’s a tool.

Here’s a quote from an internal MediaDefender email that was leaked on BitTorrent:

Nicole from pussy cat dolls has a single called “whatever u like”. It’s not selling well on itunes or playing that great on radio. A song called “Baby Love” just leaked (I don’t know how long ago). Interscope wants to know if Baby Love is picking up steam on p2p. They need to make a decision by early next week on whether they should switch to this song as the single. Please get me a score comparison on Monday for these two tracks. Also, please put beyonces, fergie, gwen, and nelly furtado singles as comparisons.

So, while the RIAA is suing the heck out of downloaders claiming that they lose them money, their monitoring of P2P itself is providing a rich source of information that businesses love. It enables the label to gauge the mood of the pay market in advance – a glimpse into the future – to ensure that they don’t alienate their customer base by giving them stuff they don’t want. In a business, this type of market foresight can be invaluable. Nearly always leading to more profits, customers feel happier and more satisfied with the products they are offered, leading to greater loyalty longer-term.

MediaDefender checks how popular the song is, produces some nice graphs, and Interscope releases the single if it’s popular enough, saving the label money and pleasing their customers more as they do so.

Long live P2P!

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