The music industry has based it’s profit on artificial scarcity via the manipulation of supply … in other words by cornering the market and controlling market share.

This is always a way to get very high profit margins because it requires very little cost once the choke hold is achieved, but is always, long term, not sustainable. What is sustainable, is growing the over all market, and adding value or services.

There is a lot of music out there like you mention that under the old system would never get marketed because it would just not offer enough return… a digital advertising and distribution model allows more people to produce, and more people to buy music, thus actually creating a bigger market for music overall. Just like nofrills airlines like westjet saw huge growth with people that never flew much before, digital music and the internet allows the creation of entirely new music producers and consumers.

And I think most people are like myself, lazy. Nor am I real music phreak. I am not going to comb every little club, forgotten corner of the web, or studio storage room looking for that next favourite song. I want to go to a site where someone has put that together for me. Where there is actually some samples and where there is something written about the music. And where I know I won’t be getting viruses, spyware and keyloggers. And performers are not going to want to set up their own site, their own artwork, and their own download servers. There is plenty of money to be made still in compiling collections, finding performers, arranging the music for the convenience of the shopper, providing promotional and technical assistance to the performers and of course actually looking to the integrity of the online transaction.

These are all things legitimate consumers and performers are willing to pay for. However they also require work, and some cost. Meaning lower profit margins for the recording industry. However to protect that margin they are their own worst enemy… they have put viruses and malware on peoples computers ( Sony! ) they have put irritating restrictions and limitations on the product that serve no purpose save to tick off legitimate consumers, and they have locked out small market performers that would be more than happy to sell their stuff online for a lower rate just to get out there.

Much like prohibition in the 20’s created a crime culture that survived into the ’70s by giving the Mafia a huge boost, the recording industries activities today risk creating a culture of intellectual property theft that will last as long as the industry itself has been around, and with very damaging consequences fro everyone, not just a few overpaid execs.