The major record labels continue to prove that they absolutely have no idea how the Internet works or how to capitalize on it.
This week's story involves the rock band OK Go. Four years ago, the band shot some quirky homemade videos and posted them on YouTube. Users saw the videos and embedded them on their own Web pages. OK Go was able to cut through the noise created by thousands of album releases every year and become well-known in certain circles, if not exactly world famous.
Now, the band is promoting its new album, "Of The Blue Colour of the Sky," and has released a video for the song "This Too Shall Pass" on YouTube. Do you love it? So much that you want to embed it on your music blog? Too bad--you can't.
On Monday, OK Go singer Damian Kulash wrote a post on the band's message board to explain how this happened. Major label EMI owns the rights to the recording. And although EMI can theoretically earn a little money from advertisements each time somebody plays one of its artist's videos on YouTube, it can't collect the money when the videos are embedded on another site.
Kulash does a fair job of explaining EMI's point of view: it fronted OK Go a lot of money for recording costs, its old revenue streams (like CD sales) are drying up, and it's desperately trying to figure out new streams--like ad-supported online music videos--to make up the difference.
But here's the dumb part. At the end of the post, Kulash points to sites like Vimeo and MySpace that will allow users to embed the video on their own Web pages. He even offers the Vimeo embed code.
So how does this play out? People who are only peripherally aware of OK Go and stumble across the video at YouTube--the most popular video site in the world--won't be able to use the viral marketing techniques that worked so well for the band last time around. These casual fans might play the video once or twice, and might even send the link to a few friends. Each play earns EMI a little bit of money. But that's a much slower way to spread the word than embedding the video on their Web page, where other visitors can see it and embed it on their Web page, and so on. Sacrificing this form of marketing will mean lower CD sales.
Meanwhile, hard-core fans who've been following the controversy and really want to embed the video will just use other sources. So EMI just gave up a great way to reach new fans in exchange for...nothing.
The Internet's a great promotional tool, but you have to be willing to give something away. Piracy is inevitable, and that's a bummer. But if the product's good enough, free samples create paying customers. Isn't 10 years long enough to learn this lesson?