I read some article ages ago (still trying to find it again, but that issue is  for another time) about the state of the music industry.

They were, and are, in deep shit.  This is bad for the artists, and largely the executives of the various music industry corporates dropped the ball.  This holds true for the film industry to a degree as well.

Many, many years ago now, when I developed my very first internet application (we are talking around 1995), I showed it to a few of my colleagues.  They were amazed that a file over on that server could be accessed via the telephone like a fax machine is used for sending the image of a piece of paper. (best analogy I could come up with back then).

I had immediately thought about the possibilities and implications.  Even then copying games and the like was prolific.

Years later internet based piracy had gained traction, and the music industry was in damage control.  They were losing revenue through piracy with sites like Napster and they didn’t like it. What is worse is the executives and their legal advisers did not understand the technology or the way the internet would change society forever.

This was where the music industry reached a crossroad, embrace the internet, crush the internet or ignore the internet.

We all know what happened.  The law suits started, DRM (Digital Rights Management) was introduced.  But the music industry is still losing it’s fight. And it will disappear unless it changes.

Hindsight is a wonderful thing, but the reality is they should have gone to Napster and made a deal. A friend of mine created an online music store called Digirama, it does OK.  iTunes does OK, as did Coke’s venture.

But at the end of the day, the music industry as we know it is dead.  $0.99 for a track?  It’s still too much when you can grab it for free.  DRM?  Damn it, I made hundreds of cassette copies from my record collection, why should I be limited to 3 computers/devices?  Why can’t I play it in the car? One in three CDs with DRM or similar protection DON’T WORK in car stereos!

They also have the problem that there are the equivalent of  “self publishing” companies popping up targeting new artists.  For example tuneflow.com (I’m affiliate, so sue me ;) ) pay up to 80% of the sales price to the artist, that certainly beats the 15% the music industry pays it’s artists!

So what does the music industry need to do?

Simple.  Ditch the “hard” copy of the media, go electronic.  Work with companies like Napster to get electronic distribution going.  Cut costs and “dead weight” in the industry.  Use the internet to their advantage.

Does it really need to cost $250,000 for the producer to help produce the album?  What do they bring to the table in the modern age?

You can buy pretty good recording gear for less than US$5,000 – you can set up a basic sound room for about the same.  Your dad, sister, brother whoever can help produce it.

The music industry needs to realize they are no longer needed for the production of a quality album.  And with sites like Bebo, Facebook and the like, marketing “new artists” is no longer the huge expense it used to be. Hell, look at some of the new artists only being release on iTunes and so on.

They need to embrace the internet, or they are gone in the next 5-10 years.