By crushing Napster, record labels could kill the golden goose

The major music labels may be crowing about their legal victory against Napster earlier this week, but there are those who believe that the record industry would have far more to gain from working with the “peer-to-peer” file sharing service than by trying to crush it in the courts. For one thing the disk drives of more than 50 million Napster users are a huge storehouse of information – information that could be used by smart companies as an unparalleled marketing database.

For example: Over the past month or so, thousands of Napster users who have songs by the independent artist Aimee Mann on their computer have had messages pop up that appear to be from another user, messages that mention a new song by the artist that is available on her Web site. These messages actually came from an Internet-based marketing firm called BigChampagne, which chose Napster as a novel way of promoting Ms. Mann’s new single, Ghost World.

In a recent interview with about the campaign, BigChampagne co-founder Eric Garland said that by trying to put Napster out of business, record companies were ignoring the potential gold mine that users of the service represent. Music publishers “have just been given the greatest marketing tool they have ever had,” he said, but most of the major record labels are still determined to put the company out of business, rather than trying to find a way of working with the technology instead.

Customer surveys and marketing research are a huge part of other retail sales-oriented businesses, Mr. Garland points out. Packaged-goods companies pay millions of dollars to do research on shopping behaviour as it relates to the colours and shapes of their products, where they are placed in a store, and so on. They “can model whether the shading on a package will gain them an extra 10th of a per cent of market share,” BigChampagne partner and market research expert Tom Allison told

In fact, some consumer goods companies such as Procter & Gamble, Mr. Garland said, “used to pay housewives 10 bucks to look in their fridges” so they could try and get some insight into buying patterns and consumer behaviour. The ability to look at which songs Napster users have chosen to download would give record labels a similar insight, allowing them to see patterns – do most users with the latest Jennifer Lopez single also have Puff Daddy or Eminem? – and also make various promotional offers.

BigChampagne isn’t the only firm to come up with the idea: When the rock band Metallica sued Napster, it got a British firm called NetPD to collect the names of users who had the band’s music as evidence of copyright infringement. But NetPD now reportedly also does peer-to-peer marketing using such lists, and has even done some research for the same record labels that are busy suing Napster. According to a recent story at, smaller firms such as A.D.D. Marketing are also conducting Napster campaigns, as are independent music labels such as

Many Napster users might not like the idea of letting some marketing firm snoop into their hard drive, but that ability is built right into the structure of the file-sharing service: You show what you have to share, and others show what they have. The fact that this could be used for marketing purposes is just a byproduct of the original intent of the software – and marketing messages such as those from BigChampagne are a nuisance Napster users might be willing to put up with if it kept the service free, or reduced the price that a user would have to pay for access.

Napster is working with Bertelsmann AG – owner of the major record label BMG Music – to try and create a subscription service, in which users would pay a monthly fee for access to Bertelsmann music. But what about music from other record labels? So far, none of the other major music distributors have said they are interested in such a service – at least, not one they don’t control – which means users would be restricted to downloading songs that happen to be produced by BMG artists.

That kind of market fragmentation, with 5 or 6 or 10 different services to sign up for, doesn’t seem like a good way to get music into the hands of music lovers. Napster already makes it quick and easy – why not find a way of working with it instead of trying to kill it?

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