Mark Mulligan[Posted by Mark Mulligan]

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This week, ahead of their forthcoming release ‘No Line on
the Horizon’, U2’s label Universal Music streamed the album for free on MySpace
in the US and on Spotify in
the UK. That’s right, the world’s largest record
label gave away the new album by one of its biggest artists, for free, before
you could even buy it in the shops. This
sort of thing would have been unimaginable a few years ago. What has changed is that the record labels
are rapidly realizing the power that lies in harnessing free.

This was no scattergun strategy: Universal selected two of
the highest profile streaming music destinations available and granted them
exclusive, fixed time streaming access. The exclusivity ensured that the partners would heavily promote the deal
and with their marketing clout and user support would ensure that this would in
itself become an event. A lot of those
listeners will now go and buy the album or tracks off it. But Universal know that a very large chunk (possibly
the majority) of U2’s fans aren’t on either MySpace or Spotify. The streaming initiative reaches those other
U2 fans via the great media coverage of the streaming initiative and at the
same time directly engages with an audience which is largely complementary to
the core album buyers.

But Universal are astute digital strategists and know that
albums sales is only part of the equation. They’ll see the other key benefit being leveraging some revenue out of
listeners who are unlikely to buy the album or even pay to download single
tracks off it. Streaming services like
MySpace Music and Spotify are among the label’s better available tools to
monetize consumers’ shift away from purchasing units, to on demand consumption. They aren’t yet a direct alternative to
illegal file sharing, but they certainly strike a blow in the right direction.
Right now, they are a means of monetizing file sharers: streaming music fans
are more than twice as likely as other Internet users to use file sharing

So the equation is simple: as many MySpace and Spotify users
are never going to buy the album, at least get some revenue from them listening
to it over streaming before they can download it from Bit Torrent. Heck, some of them might even decide to go
out and buy it.

Universal are showing here that sometimes the best way to
fight fire is with fire. Free is what
file sharers understand, and right now it’s the only large scale viable way of
making money out of them.