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Music Industry Inches Forward into Reality

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With innovations sprouting all over the web to make music distribution simpler and more user-friendly, the music industry is gradually coming to terms with the realities of the internet age.

There have been some interesting recent developments. One is a new alliance between record companies and MySpace wherein listeners can purchase music at an artist's page on the popular social network site.

A battle between independent record companies and online giant MySpace has been resolved this weekend after a year-long wrangle over money. The deal, which will see music from leading British artists such as Arctic Monkeys, Adele and Antony and the Johnsons available on the site, ends the latest skirmish in the war between online firms and the music industry.

This is a step in the right direction, but it isn't much more groundbreaking than iTunes, which has been around for years. This one's better -- it's a new website called Guvera, which serves as a venue where people can freely download songs, and is backed by advertisers.

[It's] a tool that matches advertisers with the consumers most receptive to their messages. When users register, they're asked for the usual personal details (location, age, gender), as well as for insights about their tastes (their favorite music, movies, sports, holidays, countries, that sort of thing). They then enter the name of a band, song or genre to search for, and Guvera returns a list of advertiser-sponsored channels that provide the matching tracks. Once they pick a channel, they can stream or download other music paid for by that brand.

This is based on a flurry of important statistics on music consumption in the modern era, proving beyond doubt the rapid shift toward digitally-oriented listening.

The future of the music industry looks to me like a series of online marketplaces where songs and albums are available for free download, possibly divided by genres. Those running the websites will make money from sponsors and advertisers, and pay the artist a share.

The artist will also make extra money on the road -- where they'd as a result attract more concert-goers because people will have easy, legal access to their music. Given that artists already make most of their money on tour, this plays into that strength.

In short, there ought to be legal mechanisms by which music fans can get songs for free (just like political junkies can now read nearly all of our news for free), without artists getting ripped off. Absent that, people will continue to download songs and albums illegally. Failed attempt after failed attempt shows there's no way to change that. What we have now is a system that's good for nobody, including the middle-men (record companies), as the market is shifting underground.

The structural changes in the distribution of music should prioritize methods by which artists can be fully rewarded for their work.

The reason all of this is taking so long is that we still haven't quite figured out how to monetize online consumer practices, and that creates complications in attracting advertisers. But given the massive growth of the internet and the creeping inevitability that is the decline of non-digital music, we're sure to make significant headway in that category.

And once that part improves, everything will follow. Given the burgeoning opportunities for effective internet promotion, particularly with the rise of social networking, the wider reach of digital music will itself compensate for the lack of revenues generated through album sales.

Also, the fact that so many more people would have simple and free access to their music -- and thus be more likely to listen to it -- ought to make artists excited about this change (at least the ones who are in it for the art).

It's unreasonable and naive to expect record labels to go down without a fight, but it's no longer a matter of if -- it's a matter of when -- they'll embrace these changes. The smart ones will adapt their model toward online music -- just as the New York Times and Washington Post have adapted to online news. It won't be easy for them, but it'll be great for musicians and music fans.

As musicians become increasingly able to record effectively and inexpensively on their own, the main purpose record labels serve today is promotion and distribution. That'll probably continue to be the case, but their role and relevance is likely to shrink in the long-run, as the power balance in the music landscape shifts to the artist and listener -- right where it belongs.