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Cautiously, Big Labels Confront the Mixtape
By JEFF LEEDS

LOS ANGELES — Early this year, DJ Drama, a mixtape producer who made his name spotlighting new rap talents on his own line of compilation CDs, found himself in a Georgia jail cell after being arrested on charges of racketeering in connection with his recordings. This week, less than a year after authorities raided his studio, and with the case still pending, he found himself in a more agreeable setting: the Billboard album chart.

Though Drama’s new recording, “Gangsta Grillz: The Album,” shares a name with the long-running series of underground compilations that made him a mainstay of Southern rap, it came with one big difference: It was sanctioned and released by a major label, Atlantic Records. And since the CD is chock-full of authorized appearances by rap stars ranging from Young Jeezy to OutKast to Diddy, it could be completed only after a flurry of legal paperwork.

“It’s difficult, and the process is tedious and strenuous, but it’s just something you have to go through,” DJ Drama, whose real name is Tyree Simmons, said in an interview this week.

“Gangsta Grillz” — the legal version — sold roughly 49,000 copies in its first week, enough to enter the chart at No. 26 but far from a smash.

Yet the release of the album does highlight the music industry’s strange, and strained, relationship with the mixtape as a product and a potential promotional device. Mixtapes, which often include previews of unreleased songs and casual freestyle rhymes, were seen as instrumental in the rise of stars including 50 Cent and Lil Wayne. Major-label executives confide that they have enlisted top mixtape D.J.’s to create compilations that feature their artists — copyright law notwithstanding — as a way to build anticipation before the release of an act’s formal album.

Now, Mr. Simmons and others argue, the industry’s crackdown on unlicensed mixes has backfired by quieting buzz and contributing to a sharp slide in rap sales. And even as investigators seize millions of illicit CDs, the big labels’ own attempts to recreate the fast and loose feel of mixtapes in an authorized product have stumbled.

When the Universal Music Group, the industry’s biggest corporation, tried to tap the trend, it left fans cold. Universal released three mixtape-style compilations under the brand “Lethal Squad.” But despite an inexpensive price tag ($5 to $6) intended to help them compete alongside unlicensed compilations, the albums, featuring sanctioned remixes by less prominent D.J.’s, have together sold only about 20,000 copies so far, according to Nielsen SoundScan data.

Mr. Simmons called Universal’s effort “a day too late,” adding, “If they were going to try to do that, why not do it with the powers that be in the mixtape game?”

Universal earlier this year did undertake an effort to create a licensing regime that would allow a select group of D.J.’s to incorporate songs from its catalog into their mixtapes, people involved in the project said. But the plans foundered amid debate over several issues, including how the system would handle required payments to music publishers and whether it could include Universal songs that contained samples from earlier recordings, said an artist representative briefed on the issue, who did not want to be identified because the talks were confidential.

Producing a by-the-book compilation did work in one instance: The Miami radio host and mixtape producer DJ Khaled enjoyed one of the year’s surprise hits with a legal mix-style album, “We the Best,” which has sold roughly 283,000 copies since its release in June. But that album came through the independent Koch label, which has developed a specialty in marketing hard-core rap, and unlike most mixtapes, it spawned radio hits.

Since Mr. Simmons’s arrest, some D.J.’s say, the traffic in mixtapes has suffered a severe slowdown. Clinton Sparks, a producer and mixtape D.J. behind the rap lifestyle Web site mixunit.com, said he and his associates had decided to focus the site away from mixtapes and toward merchandise, including T-shirts, sneakers and posters.

“We don’t want them to now look at us as we’re stealing from them,” Mr. Sparks said of label executives. “That’s why we backed off.” Though major rap acts even now solicit D.J.’s to promote them through mixtapes, he said, “we can see now that the labels and artists don’t necessarily have our backs.”

Mr. Simmons, for his part, draws a connection between the apparent decline in the mixtape circuit and this year’s sharp drop in rap sales — more than 20 percent, far more than the 15 percent slide in album sales over all.

It “ain’t no coincidence,” he said. “Look at the last four or five years of hip-hop, and those who’ve really built names for themselves in the game, the majority of it comes from mixtapes, period. Without that, you don’t have any movements.”

Others, though, see a more nuanced picture. For instance, the rapper Chamillionaire, a longtime mixtape performer who eventually became a star on Universal Records, openly promoted his latest mixtape this year; even with the supposed extra promotion, his label-sanctioned album sold only 180,000 copies, barely one-tenth of his previous album’s total.

Investigators for the record companies suggest that for all the headlines and chatter generated by Mr. Simmons’s case, the production and sale of unlicensed compilations has continued mostly unabated. Brad Buckles, who is in charge of antipiracy efforts for the Recording Industry Association of America, said that while certain Web sites that had trafficked in mixtapes “disappeared,” “the products started showing up elsewhere.”

“On the street,” he added, “we’re finding about as much of this stuff as we ever did.”

Mr. Buckles said investigators had seized roughly three million illicit mix-style CDs this year.

Still, critics say the industry’s antipiracy efforts, which have included raids on record shops that sell unlicensed CDs, as well as on underground manufacturers, are making a difference, even if the long-term impact is unclear.

Gus Joannides, owner of Sound City, a rap-centric record shop in Queens, said that the cloud over the compilations had become one more hassle for independent retailers, who are already straining to stay afloat in the ailing music business.

“They’re desperate,” he said. “They’re losing money, so they had the R.I.A.A. aggressively going after the stores. They’re cutting their own throat.”