Eminem CD already pirated

May 24, 2002|By Jon Healey and Chuck Philips | Jon Healey and Chuck Philips,SPECIAL TO THE SUN

Despite extraordinary efforts to keep it under wraps, the new CD from platinum-selling rapper Eminem met the same fate as every other recent release from a major artist: It went out for free on the Internet long before fans could buy it.

The Eminem Show (due in stores Tuesday) still is expected to sell more than 1 million copies in its first week. Yet its vulnerability to pirates shows how ill-prepared the music industry is for a new digital era.

Officials at Vivendi Universal, the global media conglomerate that distributes Eminem's records, held an emergency meeting Monday to discuss further steps to safeguard sales. The company already had taken the unusual step of moving up the release date of The Eminem Show by more than a week.

The problem for VivendiUniversal Music Group and other record companies is that established techniques for developing and promoting artists are threatened by the growth of networks that let consumers download music for free.

Record companies typically incur millions of dollars in costs setting up superstar releases at radio and retail outlets. Labels execute lengthy global marketing campaigns incorporating several music videos and radio singles staggered over a two-year period with the aim of stimulating continued sales.

Such industry-standard campaigns, built upon gradual exposure to specific songs on an album, are likely to become obsolete in a world where consumers can sample every track before a recording is even put up for sale.

"There are more than 3 billion downloads a month around the world," said Jimmy Iovine, head of Vivendi Universal's Interscope Group.

Iovine said piracy of Eminem's CD shines a light on a problem that is damaging the careers of lesser-known acts.

Because The Eminem Show is so widely anticipated, many fans are likely to purchase the CD even after they download it. But Iovine and other executives say fans frequently download only the best songs of a newer artist and skip buying the record. This undercuts not only sales for the company, but also that artist's ability to record a second or third album.

Also, because the profits from top-selling albums subsidize the 85 percent or more of the acts that don't break even, any drop in sales for the likes of Eminem undermines the support for less-heralded artists.

The relentlessness of piracy has the major labels contemplating more aggressive tactics, including releasing albums on discs with electronic locks that deter digital copying. They've also joined the Hollywood studios in lobbying for a federal law that would require computer and consumer-electronics manufacturers to alter their designs to combat piracy.

In addition, executives at several labels are kicking around the idea of suing universities, companies and individuals that operate computer servers whoallow storage of stolen songs that can be accessed by file-sharing services.

Other interest groups, including representatives of a leading file-sharing network and a tech-industry trade association, want to tax an array of hardware, software and services to compensate copyright holders for the rampant downloading.

Global music sales were $32 billion last year, a 16 percent drop from the year before. While some in the music industry blame the economy and a shortage of high-quality releases, many label executives put the blame on Internet piracy.

Champions of online music sharing accuse music corporations of cheating artists and gouging consumers. They say downloading songs is a legal exercise of consumer rights that actually promotes sales.

Consumer advocates argue that it's perfectly legal for consumers to make digital copies of the CDs they buy and to record songs from their collection on custom CDs for personal use. And stopping consumers from making easy digital copies won't make much of a dent in piracy because there are other ways to "rip" songs from a disc, said Eric Garland, chief executive of Big Champagne, a company that monitors file-sharing networks.

Jon Healey and Chuck Philips are reporters for the Los Angeles Times, a Tribune Publishing newspaper.

HFStival 2002

Starring: Eminem, the Strokes, P.O.D., Papa Roach, N.E.R.D and others

Where: RFK Stadium, Washington

When: Today and tomorrow

Tickets: $39 per day ($69 for both days)

Call: 410-481-SEAT

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