Won the battle loosing the war

With RIAA celebrating the triumph they had over P2P in court last week, Nine Inch Nails, Oasis and Jamiroquai are thinking of doing the same thing that Radio Head did last week. That is going it alone on the internet, no one between them and their fans. The problems that will be encountered by the bands are minimal, the problems encountered by the Music Industry, possibly insurmountable.

Even the hardiest music executive is going to struggle to spin this news. There’s no hiding what’s occurring here. The music industry is on the threshold of disintermediation, a fancy word that means the Internet is threatening to blast a thick layer of the sector’s infrastructure into blue oblivion–just like it has with travel agents, stockbrokers and newspapers. Source: CNet

There is a lot of changes that will be coming, and it all depends on how the industry reacts. Given that artists are paid very little for the album unless they are able to negotiate a better contract, free might just be the answer. Artists have been able to make good money from concerts, that will not diminish because the music is on the internet.

The longer term ramification of this one is if there are no more A&R reps, and no more music industry as we know it, there are going to be a lot of changes in how we interact with music. Radio stations, streaming media, internet radio, and the whole system breaks. There is no possibility of getting royalties when the object is free; there is no room for error here on this one. The industry much like the travel industry, much like book selling, has been altered by the internet. How people interact with these kinds of systems, the whole process changes.

It might be bumpy at first, but given the success and support of MySpace or the next level of music/fan interaction kind of web site, we may be watching to see who will be the next Amazon or Google of music. It will not be RIAA, it is going to be someone who can build the next commodity delivery system wrapped up in advanced Web 2.0, or even a start on Web 3.0.