Music Is Going To Bits

Tired of fighting the digital revolution the music companies appear to have finally decided to join it.

After years of futile efforts to stop digital pirates from copying its music, the music business has started to copy the pirates.

Online and mobile Relevant Products/Services services offering listeners unlimited, "free" access to millions of songs are set to proliferate in the coming months, according to executives of the recording companies, Internet service providers and cell phone makers who gathered for a music conference [in the U.K.] over the weekend.

Unlike illegal file-sharing services, which the music industry says are responsible for billions of dollars in lost sales, these new offerings are perfectly legal. The services are not really free, but payment is included in the cost of, say, a new cell phone or a broadband Internet access contract, so the cost to the consumer is disguised. And, unlike pirate sites, these services provide revenue to the music companies.

It is about time. However, the music industry's efforts to treat its customers like criminals is going to leave a lingering bad taste.

So what prompted this sudden acquisition of good judgement?

“YouTube is a conduit between artists and fans,” Brian Message, the co-manager of Radiohead, Faithless and Kate Nash, said at the annual Midem gathering of music executives in Cannes, France, this week. “These days an artist can be a global brand and record labels are no longer the only option.”

Digital music sales via the Web and mobile phones climbed 25 percent to $3.7 billion last year, making up a fifth of the global market, the International Federation of the Phonographic Industry said Jan. 16. Handset makers are providing a new source of revenue for artists by signing deals with music companies to boost sales of smartphones that can download tracks legally online. Artists can also get payments from YouTube for hits on their videos.

“Because of broadband, wireless and the Internet in general, consumers are much more empowered to seek out the music and media they are interested in,” said Aram Sinnreich, co- founder of music industry consulting firm

Radar Research in New York. “The reality is there isn’t going to be a single business model.”

There is nothing like finding out that you are not the only game in town to focus a businessman's mind on business.

The music industry will be increasingly managed online, without the main backing coming from record labels, according to music managers at the conference. That includes online ticket sales, getting per-play licensing payments from YouTube or creating personalized music Web sites on MySpace Music.

I think a good term for this transition might be: Edison joins the 21st Century. And now a days it is not only Edison who is Looking for the band.

Cross Posted at Classical Values