Not only are music companies building Web sites and preparing for digital downloading, but most are also making investments in a range of different companies that are helping build the infrastructure to make Web music attractive to consumers. Piracy certainly hasn't disappeared. But the formation last year of a consortium of 150 companies in music, computing and electronics has helped develop security standards that will at least plug some of the holes in the dam and make it harder for the average person to listen to music illegally, record executives hope. Anyone downloading such music illegally will find it won't play. The marketing potential also has helped record companies warm up to the Web.
Executives blame lack of awareness.
A consumer-satisfaction study conducted a few years ago by the Recording Industry Association of America and the National Association of Recording Merchandisers found that one of the main reasons fans don't buy albums of their favorite acts is simply not knowing the album is out. As marketing costs escalate, future profitability will come from selling records to more of the population. Mr. Shapiro hopes the Internet will help accomplish that. We currently still have really no better way to sell millions of records than getting it on the radio and getting it on the major video channels. The music companies get paid mainly through getting a cut of the advertising revenue and, in some cases, getting some basic marketing data about the sorts of people watching the videos.