The Future of Music

Some time ago I wrote the following in a piece on intellectual property in the digital age:

"... record company that on one hand pays radio stations to BROADCAST its hit song, while at the same time complaining that it is losing money because people are sharing the song on their computers"

Today I was looking at internet radio software that receives a broadcast stream from an internet radio station, and converts each song into a MP3 complete with ID3 tags. The point is that to build an MP3 collection, you do not need to illegally download music, all you need to do is capture the broadcast stream.

In practice this turns the economics of music on its head. In the past, performers made most of their money from recordings and used live performances to promote the recordings. The emerging business model is that performers give away their music to build an audience and then make their money from live performances.

In practice, this model has a lot to recommend it. As the audience grows older, they tend to become financially better off and willing to pay more for live performances. Properly managed, a performer can build a lifelong career that becomes more and more rewarding. Not surprisingly, this business model is both well proven and emerged in Silicon Valley.