Eminem CD spotlights new piracy patterns

That figure comes care of Gracenote, a company whose window into computer users' listening habits offers a sobering look at the changing patterns of Internet piracy and traditional music bootlegging.

Gracenote maintains a huge online database that can identify CDs by calling up the exact list and length of songs. Most of the popular music software programs for computers, such as Winamp or RealNetworks' RealOne, check this database when a new CD is put into a computer, allowing the software to tell a listener the name of the CD and its song titles.

Generally, this high-tech "Top 40" holds few surprises. But last week, Eminem's "The Eminem Show," which was yet to be released, cracked the chart at No. 2. Although pirated versions of the album were widely acknowledged to be online in MP3 format, Gracenote's figures look only at physical CDs, not downloads played on a computer.

"It's pretty safe to say that it's all CD-Rs that people have bought off the streets or burned from friends," said Gracenote CEO David Hyman. "This is the first time anything unreleased has shown up at No. 2."

Eminem's label, Vivendi Universal-owned Interscope, twice moved up the album's release date, citing widespread Internet piracy. Some retailers reportedly began selling it Friday in advance of Sunday's last-minute official release date. But the direct link between pre-release online song-swapping and bootlegged CDs has rarely been drawn as clearly as with this album.

Get it early, just $5
The Friday before the Eminem album's long-awaited release, a busy street corner in New York was dotted with bootleggers' card tables and blankets, each strewn with pirated copies of CDs and movies for sale.

"The Eminem Show," priced at just $5 a copy, sat next to videotapes of "Star Wars: Attack of the Clones," released into theaters two weeks ago.

Bootleggers, who declined to be identified by name, said the Eminem CDs came from the Internet, although they didn't give details about how they downloaded, burned or bought the copies.

The Internet "is the only place where we can touch it," said one street vendor, who didn't want to be identified.

Gracenote's data shows a few patterns that may lie behind these bootleggers' business, however.

The company's database examines CDs' tables of contents down to slices just one-seventy-fifth of a second long. Copies that look identical at that scale almost always come from the same master copy, the company says.

In the case of the Eminem CD, eight slightly different versions accounted for most of the traffic. That means there's likely "eight major guys doing most of the pressing of this," Hyman said.

The company did a little detective work to figure out where most of the traffic originated. About 86 percent of the CD listening came from inside the United States. Los Angeles was the top listening location, and New York was second, Hyman said. The company hasn't crunched the numbers enough to figure out whether each location had its own dominant version of the bootleg, he said.

Gracenote doesn't give exact figures on traffic, but it said the No. 2 slot in its charts represented a total figure of listeners in the "mid-tens of thousands" over the course of the week. Because most major music software stores song information on the computer after checking Gracenote's database once, many or most of those tens of thousands represent individual listeners, rather than multiple listens by the same person.

Will listeners buy the real thing?
Eminem's previous album, "The Marshall Mathers LP," set sales records in 2000, with more than 1.7 million copies sold in the first week after release. The industry will be watching the new release closely, both as a sign of the health of the struggling music business and as an indicator of the effects of early Internet piracy on major releases.

Analysts caution, however, that the real result of the early piracy will be impossible to untangle, whether sales figures are high or low. The online versions and bootlegging could serve as a marketing vehicle, whetting fans' appetite for the real thing, noted P.J. McNealy, research director for GartnerG2, a division of the Gartner research firm. Or it may cut into sales.

"We've yet to see hard numbers on what the marketing effects of piracy are," McNealy noted. "This could be like "Attack of the Clones." People may have pirated that, but they still went out and saw it in the theater."

Sales figures for the first two days of the Eminem release weren't yet available.

Gracenote would not comment on whether it has been contacted by Interscope as a result of its information. An Interscope representative could not immediately be reached for comment.

Hyman said the company didn't keep enough information in its database to be useful to anti-piracy investigators. The technology does log Internet addresses and count CD titles, as well as keep a username for people checking the database, but it does not correlate this data, he said.

"We don't keep the data" that antipiracy investigators might want, Hyman said. "The last thing we'd ever want to do is become some kind of policing entity."

News.com's Jim Hu contributed to this report from New York.