DeWolfe will not disclose terms of the deals he strikes with record labels, but he said his site sometimes pays labels for the right to post the songs and sometimes barters for services of equal value.
Music labels are trying a number of online strategies, not only to boost sales but to gain crucial data about their customers.
R.E.M.'s Michael Stipe thanked fans for listening at MySpace.com.
(Kelly West -- AP)
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For example, some labels under Universal Music Group -- the world's largest record company, with more than one-quarter of all global sales -- give record buyers Internet-only bonuses when they buy CDs.
Included in each copy of the latest CD of rapper LL Cool J, on Universal's Def Jam Recordings label, is a unique code. Fans who purchase the CD can enter the code at LL Cool J's Web site and, after registering, gain entry to a VIP section with more songs, videos and other exclusive material. Universal also partnered with the online auction firm eBay Inc., allowing LL Cool J's VIP-section fans to bid for a day in the studio with the best-selling rapper, including the opportunity to record a track with him.
In exchange for offering those bonuses with the LL Cool J CD, Def Jam gets data about its customers who register online, information that it can use to better target marketing efforts for its artists.
"Now you have a profile of who your consumer is," said Larry Mattera, senior vice president for Island Def Jam Music Group. "It helps us to target where to spend our marketing budget."
Mattera said he has been approached by MySpace but has yet to release one of his artists' songs to the Web site. "They come after us for A-list artists and we want exchange of value," he said. He would give one of his top-sellers to MySpace, he said, if the site would also post the music of one of his lesser-known "baby bands."
Many bands are making new albums and singles available for sale at online music stores, such as Apple's iTunes and Napster, before physical CDs arrive in record stores. The early-to-market strategy has been necessitated by the rise of peer-to-peer file-sharing networks, such as Kazaa.com, where users trade songs for free.
"If we can simply allow more people to purchase [a song] than take it from Kazaa, it's a success," Mattera said.
The explosion of online options has almost destroyed the concept of release date, the highly anticipated day that fans would swarm music stores to buy their favorite band's new album.
On MySpace, Stipe wrote that "the record comes out for real on Tuesday Oct. 5th." But for many of the R.E.M. fans who read his posting, "Around the Sun" has been out "for real" for nearly three weeks.
