A major label's latest brainstorm in the attempt a make a bonehead move designed to shoot themselves in the foot didn't get much play in the media last week. So I figured a slapp was in order. In fact, I wouldn't have heard about this unless I was given the ultra fun assignment at my day gig to pull together some news blurbs for our next issue. And I stumbled upon this story by accident.

Ok get this; Universal Records have decided to screw themselves out of free exposure to millions of people each month. Just how did the boneheads in suits at their corporate office decide to do this? They figured that websites and satellite companies shouldn't be giving their artists free exposure any longer by showing music videos.  Instead they have decided that this marketing tool should instead be a revenue tool and they will charge companies for the privilege of giving their artists free exposure.  And your profits are going down why?  Wait it gets even better� 

According to News.com, Universal plans to pressure websites to sign up for this new scheme.  "As an inducement to sign up, Universal plans to stop buying advertising on any site that does not strike a deal under the new policy," News.com said in their report last week.  This is brilliant. Isn't there a word for this kind of policy?  And isn't this kind of a new spin on payola? 

The good news is that the big sites like Yahoo's Launch and AOL who get the advertising contracts have the cash to pay for the privilege to advertise Universal's artists. And if they don't, then Universal can always count on MTV to show their videos at 3 in the morning and get that revenue. Oh, wait, does MTV pay for the few videos they play? No, but most likely the artists that are going to lose exposure pay for it as "recoupable" expenses out of their royalties. 

I asked my boss here at anti if he heard about this and what he thought about it. He did his usual lifting of one eyebrow as he shrugged and replied, "If they don't want the free exposure for their bands, there are plenty of other labels that do". I wonder if the folks at Launch and AOL had a similar reaction. I doubt it, but you know what, I had a brainstorm of my own to turn this around. 

Since videos are basically advertisements for CDs, why are websites and cable and satellite companies giving away this advertising for free? They should be charging the record labels for this valuable exposure for their artists, not the other way around. Even if the labels pull the regular advertising as a result, in the end they are ones hurting themselves because they will sell less CDs.  I can't believe Yahoo and AOL and all of these other sites are just giving away this advertising for free. Are they nuts?  This is a cash cow. AOL reportedly gets 4 million viewers a week for their video section. If they charged 10 cents a view that's an additional 1.6 million a month added to their bottom line!  Time Warner Cable reportedly shows 8 million on demand videos a month, they are throwing away 800K a month in ad revenue! 

I know that most people could care less about this topic but it did anger me because this is just another example of how the labels are screwing their artists. That baby band that might have received valuable exposure with a cool video will now have one more hurdle to overcome in their uphill battle to succeed. This is just another example of some of the bonehead thinking that goes on at the corporate offices at major record companies. It seems that they like to loss money. First they hire A&R people without any balls; these are the people that flood the market with mediocre copycat bands that don't sell because people prefer the originals. (Forget exciting new bands that offer something different, we want clones!) They fought one of the greatest promotional tools since radio (MP3s) and now they are shooting themselves in the foot by removing another major tool to get the word out about their artists. Sorry but magazine ads don't come with sound but videos do and hearing is believing. I can't tell you how many CDs I have purchased after seeing a video for a song that radio wasn't playing. This even helps crap bands,  think of all the CDs Motley Crue sold because of their ultra cheesy videos! Even if the big corporate sites sign up for this, the bands and labels are losing exposure from the entire collective of smaller independent sites (you know the ones with credibility with the cd buying public?)  So a year from now when we read yet again about the falling profits at the major record labels, remember this slapp and the fact that they helped once again to bring it upon themselves. 

Check out the News.com story for more on this brilliant label move.

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