Digital Nation: Paying To Play In Cyberspace

Musicians and labels pony up for chart positions at MP3.com and Firstlook.com.

(This is another in a continuing series of reports about music on the Internet.)

Staff Writer Chris Nelson reports:

Posting a song on MP3.com can mean both instant recognition and instant anonymity for a band.

A group that may never have played outside a garage before can immediately have its work heard by anyone across the globe. But that group also would be competing with the roughly 31,000 other artists on the site who are hoping to have their work heard by fickle MP3 fans.

One of those musicians had an idea.

“One of our marketing guys came up and said, ‘Some guy wants to pay to be on our charts,’ ” MP3.com president Robin D. Richards recalled. “I said, ‘We can’t do that.’ ”

But then Richards started kicking around the idea. It didn’t take long before MP3.com launched “Payola,” a set of charts — independent of the website’s top-40-downloads ranking — that allows artists to bid for the top spot in 13 genres.

The Payola charts are openly labeled “paid promotions,” and thus avoid allegations of the more infamous payola, the practice in radio of secretly accepting cash and other goods in exchange for airplay.

Like the recently launched Firstlook.com — an audio-clips website that lists the fees record companies and retailers pay to have songs added to the site — Payola is taking the notion of paid music sponsorship into new arenas.

The practice may be indicative of a future, some analysts say, where overt sponsorships become a more familiar component of the music landscape, particularly one in which record companies are searching for ways to make money as they give away music.

At Firstlook.com, 10 genre charts list dozens of songs and invite visitors to rate them, using a star system. But each song’s position on the chart is determined by how much a sponsor is willing to pay.

On Tuesday (Oct. 26), for example, the top spot on the alternative chart — purchased for Powerman 5000′s electronic-rock song “When Worlds Collide” (RealAudio excerpt) — went for 50 cents. That means the sponsor pays Firslook.com 50 cents each time someone clicks on the 30-second audio clip of that song.

Firstlook.com put together several focus groups over the past year to gauge music fans’ reactions to the site. Not only were listeners unfazed by the transparent sponsorship, they were excited, Firstlook founder and chief executive officer Rand Bleimeister said.

“There was an interest that record companies and music retailers would actually pay to have [music fans who were surfing the Web] listen to music,” he said. “They thought that was kind of neat. It made them feel important.”

There was a time in the 1970s and ’80s, Bleimeister said, when overt sponsorship of concert tours prompted cries of “sellout.” Now, young people have accepted the business that underlies the art.

Last year, for instance, Interscope Records paid KUFO-FM in Portland, Ore., to play hip-hop/metal band Limp Bizkit’s “Counterfeit” (RealAudio excerpt) for five weeks, with an announcement before or after each spin, saying the airtime had been bought. And such hitmakers as Lauryn Hill and Britney Spears have mounted tours in recent months that are sponsored by clothing companies.

But Richard Doherty, director of research at the Envisioneering Group market research firm, said that while teenagers are more savvy about business tactics, awareness can breed suspicion.

“A lot of Gen Y listeners are very wary of anything that’s going to put them in a trend,” Doherty said. “Over-30 people see it as an advertisement — the same as on the side of a beer cup or on a blimp — but Gen Y kids are very aware of, ‘If I pick this, what’s going to happen next?’ ”

At MP3.com, the top spots during the first week of the Payola charts are going for a range of prices — about $2 on the comedy listing and $150 on the alternative chart, Richards said.

Richards added that he doesn’t worry that the overt sponsorships could leave a bad taste in music fans’ mouths. The charts spark interest, he said, particularly from people who want to know whether a band that would pay for its listing is any good.

“This is exactly what consumers would expect of an MP3.com — in your face and honest,” Richards said. “If you don’t like this situation, tell us, and we’ll take it out. But the one thing we’re not going to do is hide what we’re doing.”

* * *

Free MP3 downloads from several current hitmakers as well as critically acclaimed but less famous artists are available at myplay.com. Among the dozens of tracks currently posted are Powerman 5000‘s “When Worlds Collide,” Buckcherry‘s “Lit Up” and “Paid,” from Kid Rock‘s 1996 album Early Morning Stoned Pimp. Also available are an unreleased song from alternative-country singer Johnny Dowd and cuts from Ash and Wheat. Myplay is an online music-storage company, offering listeners free 250-megabyte “lockers” to store MP3s. …

Beatles producer George Martin has signed on as chairman of the advisory board at garageband.com, the website for new bands co-founded by ex–Talking Heads keyboardist Jerry Harrison. In November — and then on a monthly basis starting next year — garageband.com will award a $250,000 recording contract to an unsigned band that posts music for public review on the website. The advisory board — which also includes producer/musician Jim Dickinson (the Replacements, Big Star) and producer Ed Stasium (the Ramones) — will work with the signed bands, according to a garageband.com announcement. …

In the spirit of Halloween, RioPort.com is offering a number of spooky spoken-word and musical downloads through Nov. 1, along with a Halloween-themed skin for its Audio Manager software. Among the free downloads available are spook-queen Anne Rice reading from her latest novel, “Vittorio the Vampire,” and occult-band leader Glenn Danzig reciting the lyrics to his new single, “Five Finger Crawl.” Retail partner K-Tel Records (www.ktel.com) will also offer a number of new tracks for download, including early rocker Chubby Checker‘s “Doin’ the Zombie” and a reading of Edgar Allen Poe’s “The Pit and the Pendulum.” (SonicNet’s parent company, MTV Networks Online, owns a portion of RioPort.) …

England’s empeg, Ltd. plans to have a 50-gigabyte MP3 console for the car — capable of holding more than 800 hours of music — on the market in early 2000, spokesperson Rob Voisey said. The company’s current four-gig version, expandable to 20 gigs, sells for $1,099, if you can get on the waiting list to buy one. …

MP3.com lost almost $20 million in the third quarter of this year, its first quarter since going public, the company said in a press release. Revenues for the period were over $4 million, up from $277,000 during the same period a year ago. The site hosts 180,000 songs from more than 31,000 mostly unknown artists.

(Senior Writer Gil Kaufman contributed to this report.)