Labels And Writers Struggle To Control Digital Data

On August 26, the sophomore album for Balkan-infused folk-rock band Beirut leaked, sending the band's label, Ba Da Bing, into a fever. Label owner Ben Goldberg had ponied up the additional money to have the Beirut advance promotional CDs digitally watermarked with the identity of the recipient as a deterrent to would-be file-sharers. When the leak was traced, the results indicated that it originated from an advance copy sent to music journalist Erik Davis. It would seem that the watermarking did its job in pinpointing the culprit. Except there's a catch.

Davis didn't actually leak the album. He wasn't even near a computer when it happened, and hadn't been in possession of the disc for more than a week. Davis was at Burning Man that day. A few weeks before, he'd unloaded a bag of promo albums at a nearby thrift store. He suspects the watermarked record was among those dropped off, later picked up by a used record shopper and subsequently uploaded to file-sharing networks. An agitated Goldberg had alerted publicists and labels of what Davis had allegedly done in an attempt have him removed from mailing lists. It would be another few weeks before Goldberg and Davis actually spoke and came to an amicable understanding.

This episode highlights a growing concern among the labels that still send out promo advances and the writers and radio stations who receive them. Labels have maintained that the records are on loan in exchange for publicity. But writers and stations have historically treated promos as their personal property since they are sent with the expectation that the writer/radio station will help drum up buzz and support for the records which will then, in theory, help spur sales.

"At no point do we as music writers enter into anything like a contractual relationship with labels regarding promos," Davis said. "We make no formal agreements with them about the material they send us. If it's my property, I can dispose of it as I see fit, within the boundaries of other laws." And that's where the contention is: who owns a promo record?

The 1976 Copyright Act grants six exclusive rights to copyright holders: reproduction, derivative works, distribution, public performance, public display and digital transmission. It also includes a clause known as the First Sale Doctrine, which allows that when the copyright holder sells a copy of a CD, the person who purchased it can sell, give or destroy it without obtaining permission from the copyright holder. The First Sale Doctrine is a key part of what makes video rentals, libraries and used book stores possible. Writers and radio stations claim that a "sale" has occurred even without money changing hands because the labels send records in exchange for the services the writers and stations provide, which would allow Davis to resell (or in this case give away) his promo CDs.

Most used record stores readily admit that the buying and selling of promo CDs has become a universal practice. "I don't think it's a big deal," Harris Smith said, record buyer for Mondo Kim's in New York City. "I think it's sort of expected [that promos will be resold]." Even though many promos are stamped, punched or explicitly marked with "for promotional use only, not for sale," it doesn't tend to have a bearing on the decision to buy promos or not. Most used record stores choose not to sell advance CDs before street date. "If we get something before its release date, we'll wait to put it out until it comes out," said Smith, adding that the majority of CDs they buy are not promos and that there is also very little use for watermarked CDs since they don't play on all devices. It's worth noting that most promo CDs today do not come with full art in jewel cases, and are often burned copies in plain white sleeves and, as such, have even less resale value for the store.

Even giant stations like WOXY, which receives truck loads of CDs hoping for airplay, has turned, at least partially, to trading in used records. The station played at least one song from roughly 600 albums in 2007 according to Matt Shivedecker, WOXY music director. "I don't know what our total number of received CDs was, but I know it is only a [small] chunk of the full amount of submissions that we get," he said. "When things come in that are completely out of format for us, I will trade it in for something that we need or want in our library."

For Goldberg, the decision to watermark the Beirut record wasn't to dissuade people from selling the advance, rather to guard against those who would consciously leak it. "Nobody would want their name getting out there as being to blame for a recording having gone online to the peer-to-peers," Goldberg said. "Everyday the record didn't leak, it meant less money lost on the actual album sales." Leaked albums can severely disrupt and impact the strategy for an album's release. "As a label, I put a lot of time into preparing a marketing plan for the unfurling of an album," Goldberg said. "To factor in that the album could potentially appear everywhere months before its actual release date throws off that plan."

Recently, one large independent label recently had an album leak more than a month early. Because that specific album was sent out as a watermark, the culprit was easily identified and "essentially blacklisted," though that doesn't solve the marketing and financial dilemma facing the label now that the album leaked. Oftentimes there are rough contingency plans in place, but that can vary depending on how early the leak occurred. A person from the label, speaking on the condition of anonymity, said he doesn't "know what the people who are in charge of fixing these problems do, other than flood false versions into the marketplace" by putting "bunk files up as the leaked album." Masking the record's online presence with false files is a practice that first began during the heyday of Napster and usually involves uploading MP3s of silence or white noise renamed as the album's tracks.

Although watermarking helps, the label source admits it doesn't solve the problem entirely and mentions that it's a rather costly deterrent. Watermarked CDs cost anywhere from $1 to $1.50 each to produce, but an individual disc can run as much as $8, much more expensive than the cost of a regular promo CD. He is optimistic that the industry will move away from sending out CDs as advances or will adopt another strategy to guard against leaks.

A publicist for a large music PR firm, who also did not want to be identified, adds that if a writer leaked an album, she wouldn't necessarily stop sending him CDs, especially if he wrote for a credible publication and was sincere in his apology when confronted. While some music publicists might send out a warning to others in the industry, as Goldberg did, she says that there is no sure-fire way to blacklist the offender and doesn't think it's an effective solution.

The music industry has been riddled with the twin evils of entitlement and greed for some time now. But as technology makes things like leaked albums more common and easier to spread, it's going to ultimately come down to a choice for those who are in a position to undermine the industry to choose altruism over selfishness. "I think music writers and radio stations who depend upon the health of the music business as much as any of us are being ultimately self-destructive if they try to make a quick five bucks by unloading an advance," Goldberg said. "There's something to be said about being in a privileged position to have access to something, and abusing that resonates to those around you. I think a significant shift will definitely come. We're just in an unsettled period where we have to do bonehead things like watermarked advances, which are expensive to make and annoying for writers."

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