The music industry has a flare for the dramatic. As such, last year has been repeatedly portrayed as the year that the music industry broke and October as the month that sealed the deal. That was when RIAA won its first major file sharing lawsuit, reinforcing their perception of consumers as potential criminals.
More importantly, however, it was the month that Radiohead announced its pay-what-you-want scheme; Nine Inch Nails declared itself 'a totally free agent, free of any recording contact with any label'; and Madonna terminated her 25-year relationship with Warner Music Group and signed a 360 deal with Live Nation.
My sense is that the music industry is not broken, but it is going through terrible growing pains. It's outgrowing its parents and struggling to find its new identity. (We all know that this is a long and painful process.) Now, granted, "parents" is not the strongest analogy for the music labels, since they have NOT given birth to music, and some might argue they've done just the opposite. For the moment, though, let's consider them the music industry's legal guardians.
We have yet to find out what this new music industry will look like, but changes like the ones that took place last year will help consolidate an important shift in the dominant power structure. Much has been said about how this change has empowered the audience, and certainly Radiohead and Nine Inch Nails respond to this trend, but they also reflect the increasing power that the creators have obtained over the production and distribution of their content. This will be a long, slow and interesting struggle. And I would say that, in spite of the industry's flare for the dramatic, it will be a while until everybody knows what their new role is, what they are allowed to expect, and how they can relate to each other.
The year started with one of those categorical announcements that the industry and the media appreciate so much: DRM is dead. DRM was (or is) the traditional music industry's most obvious and criticized attempt at maintaining the status quo. Sony was the last major music label to offer DRM-free downloads to Amazon's new digital music store, a move that smaller labels and stores, like Amie Street and Grooveshark, had made quite some time before.
But the spirit of DRM is yet to fully dissapear, and sometimes it's the smaller startups that help keep the status quo up-and-running: Spiral Frog just announced that it is up to over 1 million uniques each month, a free ad-supported music download site that enforces a DRM. They allow the transfer of content to a maximum of two portable devices (but not iPod or Zune) and block CD burning.
And then comes the company that originally motivated me to start writing today, and whose launch has been qualified as a "Giant Leap to Nowhere": Qtrax, a legal and free downloading site that was to piggyback on the Gnutella p-2-p network, but was supposed to wrap the song in DRM and pay the rights holders through advertising. Qtrax announced in Cannes that it had cleared rights with all four major labels and had a 25 million-song catalog (impressive in comparison to Amazon's 3 million and iTunes's 6 million).
This all ended up being much ado about nothing, since the company had not really acquired those rights, and is not even running its beta version. Had this service been launched, its success, or lack thereof, would have enlightened us on the route that our imperfect and contradictory music industry chooses to take.
Any thoughts? You can e-mail me at email@example.com while comments are down.