Marillion’s plan to make money by giving away its albums

After years of fighting music piracy, another band decides now to embrace it.

In an effort to confront illegal downloads, a rock band called Marillion has developed an unusual technological Trojan Horse. The British rockers have seeded piracy websites with what appear to be illegally distributed copies of its next album.

The catch: Each file contains a hidden gizmo. When downloaders access the files on their computers, an interactive window appears with a jovial video message from the band.

“Thanks for being a fan,” says Marillion keyboardist Mark Kelly in the pop-up display. “If you’d like us to continue, please support us in any way you can.” Singer Steve Hogarth adds, “We’re not millionaires.”

The band also offers the tracks without the automated video free of charge in exchange for an e-mail address.

For years, established bands such as Marillion have tried to offset declining album sales by imploring fans not to upload albums to peer-to-peer (P2P) networks. They’re losing. According to the International Federation of the Phonographic Industry (IFPI), illegal downloads outpace legal tracks by a ratio of 20 to 1.

Marillion’s initiative may herald a new business model for coping with pirates: If you can’t beat ’em, have ’em join your mailing list. Then encourage those previously invisible listeners to attend live shows, hoping that they’ll be converted from casual fans to hard-core followers.

“It’s easier to distribute music and, because it’s so much easier, the value has been pushed down,” says Brian Zisk, cofounder and technologies director of the Future of Music Coalition. “What has really retained value is the relationship that the artists and fans have.”

That could be a financially lucrative connection, according to Mark Meharry, cofounder of Music Glue, the London-based company that created Marillion’s pop-up message. Mr. Meharry says the free-download generation expresses its fandom through attending concerts and buying merchandise. (Case in point: Just observe the spending habits of any tween fan of the Jonas Brothers.)

Moreover, Generation Y isn’t averse to product marketing, Meharry says. As corporations line up to align themselves with targeted-fan demographics, the artists stand to make money from branding opportunities.

That business model is already standard practice in China where, according to IFPI statistics, 99 percent of all digital music is pirated.

“That piracy counts as zero-cost marketing and distribution,” says Wired magazine editor in chief Chris Anderson, whose coming book, “Free,” examines the economics of giving away products. “As a result, you become famous. Then, the way Chinese pop musicians make money is largely through things like appearances for store openings and endorsements and advertising and corporate gigs.”

In the West, where music labels largely rely on music sales for revenue, the recording industry is trying to thwart piracy through highly publicized arrests of individual downloaders and through pressuring Internet service providers to crack down on file sharing.

But a few established artists have struck gold and platinum records by co-opting piracy networks.

Hip-hop superstar Lil Wayne amassed a huge audience by giving away more than 100 tracks on mix tapes released to P2P networks. When he finally released “Tha Carter III” album in June, it sold more than a million copies in its first week.

Meanwhile, Nine Inch Nails and Radiohead have doled out gratis albums that later sold remarkably well in retail stores and boosted interest in subsequent tours.

Like those bands, Marillion is fully independent and owns the rights to its music. It claims that the decision to leak its double album “Happiness Is the Road” is a matter of survival.

“The CD sales have been dropping off,” says Mr. Kelly. “Luckily, we’re protected by such a strong hard-core fan base. They buy everything.”

But the band’s core followers, 15,000 of whom funded the recording of the CD by preordering it a year in advance of its Oct. 20 release, can’t sustain a small business. Marillion hopes the P2P initiative will swell its list of 70,000 e-mail addresses so that it can directly promote concerts, merchandise, and a specially packaged version of the CD.

One further advantage of the P2P enterprise: Marillion can isolate ISP data from downloads to discover which regions it should tour.
If nothing else, the gambit provides free advertising.

“This is such a big story for us,” says Kelly. “It’s raised the band’s profile.”