The end is coming

The writing has been on the wall, the floor, the ceiling and all over the Internet for a long time now regarding "traditional" music companies. The simple reality is that, historically, music distributors have provided services that were extremely valuable to artists. Distribution, obviously, is the big service that was far beyond the abilities of most artists, even if they actually wanted to handle it themselves. Promotion, if it cost large amounts of money, might also have been too much for most artists to handle themselves, at least in the early stages of their careers.

Fast forward to today. The Internet is not just a good way to distribute music, it is rapidly becoming the only way. Faced with the option to dragging our lazy butts down to the local Future Shop to purchase a CD or to just fire up iTunes or a software sharing application and getting it now (and possibly illegally), the choice seems obvious. Add to this, music companies' historic power over the entire sales process—a power that often enticed them to force consumers to buy what they didn't want (entire albums) instead of just what they were after (thank you iTunes!)—and consumers have two more reasons to buy (or steal) online: getting exactly what they want and sticking it to the companies that have (in their minds) abused them for so long.

So, as anyone with eyes and an interest has observed, record companies are taking a kicking financially. They also seem to be in panic mode with law suits against "pirates" and gouging artists on electronic sales royalties. These ill-fated tactics are just making their previous customers angrier.

And it's not amusing the artists either; now the real catastrophe has started: big name acts are starting to walk away from the traditional system.

The simple reality is that today's artists need very little help from anyone to get their music to fans. Building awareness is also much easier than ever before. Even the process of producing music in the first place has become much cheaper and nearly anyone with a few grand and some talent can probably create a fairly saleable product. There is just less and less need for the big record companies and this—quite understandably—scares them.

So what is the "solution" for the heavily invested middle men in this shakeout? Music companies need to reinvent and reinvest quickly if they want to save any of their equity. Short of moving their investment into other markets, music companies need to recognize that the salad days of total control are gone and start listening to what artists need and consumers want. There is clearly still opportunity to make money in the music industry: iTunes and Live Nation are showing that. But business as usual or law suits against music consumers is a sure recipe for bankruptcy.

Music piracy probably is quite illegal but when a huge proportion of society is doing it almost daily, it is nearsightedness bordering on delusion to think that the law is going to save you.