On January 2 the Wall Street Journal reported that Sony BMG–one of the four major record companies that, by the paper’s estimate, release 75 percent of all commercial music–has been working with Rock River Communications to place its music in podcasts sponsored by Chrysler and Ford. Rock River’s principal business is developing compilation CDs to rock out the brand images of corporations like the Gap and Volkswagen, and their deal with Sony isn’t notable in and of itself. It’s the form their collaboration has taken that’s surprising.

Till now podcasting has been an indie phenomenon–the big labels have by and large refused to distribute their music in such an unregulated way. Sony is the very first major to get on board. The monthly Chrysler Music Legends podcast debuted in August, and the Ford podcast is due to launch at the end of January.

Podcasting came into its own in 2003, when the widespread availability of broadband and the development of RSS feeds–which aggregate new content from Web sites as they post it–made it feasible to deliver large sound and video files to thousands of subscribers. Because a podcaster needs only a computer, some inexpensive software, and a microphone to get in the game, the format exploded: when the iTunes store started offering podcast subscriptions in June 2005, it listed more than 3,000 titles.

But major-label music was conspicuously absent. The same factors that made podcasts so attractive to subscribers made them poison to the RIAA set. Most podcasts, to ensure their accessibility to the largest potential audience, use plain old MP3s–which, unlike iTunes files or tracks from the Zune Marketplace, will work with multiple software platforms and music players. Podcasts also tend to forgo digital rights management, or DRM, which can limit the number of times a song can be copied, how it can be played, and even the number of times it can be played. Until recently the majors have demanded that DRM be part of any digital distribution scheme they used, which is why you’ve probably only heard snippets of their music in podcasts. The labels have made brief clips available as promo material but have generally refused to license full songs–and few podcasters have been willing to test the current consensus on “fair use,” which permits unlicensed excerpts shorter than 30 seconds in a critical context.

Despite Sony’s baby steps into podcasting, the label’s distrust of the listening public hasn’t disappeared. The Chrysler Music Legends series targets older listeners–the legends in question include Johnny Cash, Journey, and Tony Bennett–and I’m certain this audience’s presumed discomfort with file sharing is as important as its presumed affinity for Chryslers. But if the majors are convinced file sharing is hurting them, podcasting isn’t what they should worry about. Though it’s possible, with the right software and a little time, to snip an individual track out of a free podcast, that takes much more effort than downloading the same track off a peer-to-peer distribution network. Sure, you could extract the six or eight songs from Sony’s Johnny Cash podcast, but when the Gnutella P2P network lists nearly 150 Cash tracks, why would you bother? It’d only be worth the trouble if a podcast were to include “Chicken in Black” or some other rarity you can’t find online.

The rules surrounding podcasting aren’t too concrete yet–in the absence of much legal precedent, they’re mostly interpretations of existing intellectual-property laws–but it seems to have been established that podcasters don’t have to pay royalties on the songs they program. What they do need is permission from each song’s rights holder–a ridiculously burdensome requirement that pretty much entirely explains why podcasts lean so heavily on music that labels and artists have made freely available. The majors’ refusal to grant such permission (or put together their own podcasts) has almost forced the current podcasting ecosystem to evolve with an indie focus–players who usually operate in the margins have populated the whole scene. Subscribing to a podcast of nothing but bluegrass or another of just garage punk, both of which update with an hour of new material every day, takes about five clicks in the iTunes store.

Indie labels, which generally view podcasts as publicity, have been quick to take advantage of the situation. Sub Pop’s roster includes bands like the Shins and the Postal Service, who post the kind of numbers the majors like to see, but the MP3s the label offers for free on its Web site–usually one or two per album–are fair game for podcasters. Local label Minty Fresh lets podcasters use any track in its catalog without asking. And Victory Records says its free hour-long video podcast, VicTorV, which includes teenager-friendly music ranging from emo to metalcore–there are more gradations in there than you might think–goes out to around 100,000 subscribers every month. Mark Bubb and Paul Friemel, who run the podcast, welcome the redistribution of its content: “We really don’t regulate that,” they write in an e-mail. “It is flattering that they use our music in the first place, but it is also viral . . . like when we make a sampler and hand it to someone after a show, and they like it so much they tell a friend and let them listen to it. . . . Word of mouth and a band’s fans are the most powerful form of promotion you can get.”

If other majors follow Sony’s lead and change their outlook on podcasts, it’s not likely to mean they’ve acquired Victory’s faith in the power of giving away music. Labels have spent the past couple years searching for new revenue streams to offset the damage they claim piracy is doing to their bottom lines, and sponsored podcasts could qualify–the Chrysler podcast, for instance, is free to subscribers, but the carmaker paid Sony to use its music. In the WSJ Rock River president Jeff Daniel described the deal as a return to the “notion of sponsored content” and “a patronage model.”

It’s also possible that the majors will be able to persuade the public to pay for their podcasts. Fred Wells and Gabe McDonough put together the weekly Market Frenzy podcast as well as a monthly one for the Empty Bottle, and like the vast majority of podcasts out there, both are free. (Market Frenzy is also notable as one of a handful of established podcasts to flout fair-use doctrine and play unlicensed major-label tracks in their entirety.) But the pair see the potential for podcasters to develop paying markets–especially if they have content nobody else can legally use, which major labels can make sure they do. “If you’ve got a good enough product, appropriately priced, people will pay for it,” Wells and McDonough write in an e-mail. They point to the wildly popular paid podcast of comedian Ricky Gervais as an example. At $1.95 per episode, “it’s cheap enough that it’s easier to buy it from iTunes, where we know we can find it, than to waste time trolling some file-sharing site.”

Though no other majors have announced concrete plans to enter the podcasting arena, several are clearly considering it–over the past year a few labels have made a handful of DRM-free MP3s available for sale through Yahoo, which sure looks like a test run to me. But surprisingly, no one I talked to in indieland seems worried that the intrusion of the corporate profit engine will smother podcasting’s anarchic diversity. As Wells and McDonough point out, podcasting arose as “the general public creating content for itself that is super dialed-in to a very specific audience.” Major labels, with their focus on maximizing returns, are legendarily terrible at satisfying fans with specialized tastes. If they can’t learn to offer those people something they want when it comes to podcasting, the fans will keep doing it on their own.

For more on music, see our blogs Crickets and Post No Bills at chicagoreader.com.

Art accompanying story in printed newspaper (not available in this archive): illustrationMatthew Cordell.