By Jennifer Netherby

NEW YORK (Billboard) - When the Mars Volta put out its latest album, "The Bedlam in Goliath," in January, the act gave its hardcore fans an option that is becoming increasingly popular -- and creative.

Instead of a CD or digital version of the Universal album, fans could buy a $30 USB drive designed like a Ouija board planchette. The device comes with a digital-rights-management-free version of the album and the promise of more bonus materials in coming months. Users simply plug it into their computer's USB drive and then listen to the album or download it into their music library.

The Mars Volta joins a growing number of recording artists who have experimented with USB releases in recent months, among them Jennifer Lopez, Ringo Starr and Matchbox Twenty.

More are expected in coming months. Austin-based All Access, the company behind USB releases from Matchbox Twenty and Starr, has signed deals with EMI, Warner Music Group and Universal Music Group to make USB bracelets for other artists.

"The selling point to the labels is a really good one -- it's a marriage between merchandise and music so that people will at least buy it instead of stealing it because they want the merchandise," All Access CEO Chris Guggenheim said. "It's the only for-sure non-stolen product."

HIGHER MANUFACTURING COSTS

At this point, the releases are offered more as collectibles to build fan loyalty than as sources of revenue.

The cost of putting an album out on a USB drive is pricier than releasing it on a CD, partly because bands aren't placing bulk orders and partly because flash drives cost more than discs. Guggenheim said that bracelets generally cost $5 to $7 per unit. But costs can rise to $17 per unit or more for flash drives with more memory and other additions.

Universal doesn't expect to make money on the 2,000 USB units it put out for the Mars Volta release or on the 2,000 USB units it will put out for Erykah Badu's February 26 release, "Nu AmErykah," Universal senior vice president of digital business development Cameo Carlson said.

But it does expect to keep fans connected to both acts. Those who buy the Mars Volta USB stick get a new extra on the 29th of each month, ranging from bonus tracks to wallpaper. Badu will create new bonus features throughout the year for those who buy "Nu AmErykah" on USB.

"It's not for everybody," Carlson said. "It's for the hardcore fan that wants tons of pictures, who really wants something more and the opportunity to get new stuff every month."

For bands, USB drives offer a cooler way to get their music to fans in a souvenir package that fans can wear or carry with them, giving the band free promotion.

Starr wore a wristband containing his latest album, "Liverpool 8," to the Grammy Awards, getting attention for the release that a CD jewel case certainly wouldn't. Guggenheim said that about one wristband is sold for every three CDs of Starr's album.

In October, Matchbox Twenty released its latest album, "Exile on Mainstream," on USB bracelets, putting out an initial 25,000 units. Manager Michael Lippman said that "tens of thousands" have been sold.

ROOM FOR EXTRAS

"USB is going to be the future," Lippman said. "You don't have to download it on a computer, you put it in and it comes up, (and) there's plenty of room to add additional material."

Some indie bands have turned to USB drives for releases because they can order fewer units and spend less money than they would for an order of 1,000 CDs, said Ed Donnelly, president of Los Angeles-based Aderra, which makes drives for Barenaked Ladies, Jars of Clay and indie bands like Los Angeles' Killola. Acts can place orders for as few as 100 USB drives preloaded with their album and other goodies.

Along with the songs from the album, Matchbox Twenty included its first video, behind-the-scenes footage, pictures and an Internet link to the band's site.

Based on the success of its album sales on USB, the band is selling bracelets of its live show at concerts during its current tour. All Access replicates the bracelets after a concert in minutes. The bracelets are quickly sent to the merchandising booths, where fans can buy a recording of the show they just saw as they leave. Each bracelet costs the same as one of the band's concert T-shirts.

Barenaked Ladies, considered the pioneers of USB releases, put out "Barenaked on a Stick" in 2005, a 128 MB flash drive loaded with 29 previously released songs plus videos and other content. The band followed it up with souvenir flash drives at its 2006 concerts in support of "Barenaked Ladies Are Me." The concert USB keys came loaded with the new album, live tracks, ringtones and videos for $25.

Willie Nelson, Jars of Clay and the Black Crowes also have sold USB bracelets at concerts.

Bands typically sell the drives to 5 percent of their audience at a show, depending on how tech-savvy the crowd is.

Reuters/Billboard
© Copyright 2007 Reuters.