Up and download

In the race to strike deals with hot artists, Internet companies blur legal and ethical lines.

CHALK IT UP as another first for Amazon.com: The company has beat its competitors to the punch in becoming the first to offer free digital downloads of songs by a multiplatinum Canadian songstress who has written a cookbook. Or something like that.

In the cataclysmic world of Internet music, announcements of exclusive deals greet each new day, and they're becoming more and more nuanced. In the early days—just two months ago, really—the agreements would often be as simple as an artist of note putting a few tracks on a site in the form of downloadable MP3 files. Now, sponsorships and exclusives are all the rage.

The landscape is moving by so fast that many dealmakers are forgetting germane legal issues and ethical complications.

Alanis Morissette last week alarmed attorneys and executives at her record label when news leaked that the controversial free-music Web site MP3.com would sponsor her summer tour and feature exclusive live tracks for downloading. This raises questions about the nature of her contract with Warner Bros.distributed Maverick Records. The New York Post reported that to ink the deal, MP3.com president Michael Robertson offered the multiplatinum Morissette equity in his potentially lucrative company. Details were to be announced April 27. His site, however, was not the first to gain an exclusive with a popular Canadian chanteuse.

That's where Amazon struck first. It announced April 20 that Sarah McLachlan would place two downloadable tracks from her forthcoming live album on the music retailer's site as a promotion to help spur advance sales of the disc, which will be released on Amazon and in retail stores June 15. To avoid provoking the ire of record industry executives who've complained that MP3s are easily bootlegged, Amazon and McLachlan invited her record companies, Nettwerk and Arista, into the fold, and agreed to use the supposedly more secure Liquid Audio. Pre-orders made the record, Mirrorball, the first in Amazon's history to rocket to no. 1 on its sales chart the first day it was available, though spokesperson Paul Capelli says there's no way to translate this figure to actual sales.

He does say that the promotion has helped propel sales of McLachlan's other records, increased bidding for 10 signed McLachlan lithographs on Amazon.com Auctions, and has made the cookbook, Plenty: A Collection of Sarah McLachlan's Favourite Recipes, hotter than back-bacon sandwiches on Canada Day.

"What makes this interesting," Capelli says, "is that only at Amazon could you put all this together."

"All this" includes an exclusive interview with McLachlan and fresh-off-the- digital-presses reviews of the live album and cookbook that extol her musical and culinary work in unwaveringly positive terms. Capelli insists that these critiques are generated from Amazon's editorial staff, rather than as part of the co-op program that attracted media scrutiny earlier this year. But there's room for doubt.

"If I were a critical consumer and I saw a positive review on the Amazon Web site, I'd be suspicious at first," says Kevin Kawamoto, assistant professor of communications at the University of Washington.

Amazon's bad editorial rap comes less from the fact that it's a retail site than it does from the damaging reports about its co-op advertising program. But when The New York Times broke that story, it failed to disclose its own online partnership with Amazon's main competitor, Barnesandnoble.com, further highlighting the murkiness of deals between companies, artists, and media organizations in the digital age.

While some are left to ponder all these developments, the music exclusives keep coming. Barnesandnoble.com had better move fast: Celine Dion awaits.

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