DON'T FORGET: Friends tell friends about music they love and they tell others. It is all very personal and its not likely that record companies will provide innovative leadership on the Internet. Social networks are very domain specific. We all have our little communities on line; but most don't translate into millions of friends. The record companies know the postmodern record business will not survive as we knew it.
The big four labels are desperate to find a way to get the "fans" to pay for music which is a choice, not a necessity. Most music is taken free of charge not because the fan doesn't have the money to pay, but because they regard the Internet as a free domain. Every kid knows how to rip a download. I don't even call them "fans" anymore. They are far too sophisticated and knowledgeable about the world of music and the biz to suit that appellation. They are really allies, patrons of the musical arts, members of a tribe. They have all watched MTV, and they know that when they buy the CD or the t-shirt, they are supporting the artist's survival. A strong and active live act is key to the process of selling artist's merchandise.
The record companies want to continue forcing music into the 'get a single on the radio and sell some albums' system that gives them the power to manipulate their distribution mechanism. This assumes that somebody still listens to the radio and they remain willing to be told what music is valuable. However, the prevailing method of sharing music is liquid and free. Texting is the new promotional weapon of choice for a cyber-social, cellular generation, bent on taking control. The record business seems to be lost in the digital convergence, it will need a new image, some new acts and a new product to survive. However, the biz is not ready to start over.
In the future the music lovers will download the files directly from the artist's site; most often free of charge. But, if they love the act, they'll pay. The proactive artist must create a vibrant personal appearance act and play a lot of local gigs. If they can satisfy an audience and lure them back with their friends they will generate high profit sales of CDs, and other merchandise, while the buyer is hot.
If singers and bands concentrate on becoming the dominant musical force within driving distance of their homes they can turn a profit with relative ease. And, they'll sleep in their own bed. If you can't make it at home, you can't make it anywhere. If you can make it at home, you can make it everywhere. Dominate the music scene within one hundred miles of your house. Control the income streams. Don't spend the receipts on long distance travel, hotel rooms and per-ems.
The first plateau of success is survival. That is accomplished when you make your living from music, without a day job. That is no little feat in The Music Renaissance. It presumes that you have a short and long term plan. It demands that you play your instrument well, and that you develop your songwriting and performing skills. To build a successful career in the digital music business you must learn how to play the game, you must execute perfectly well, you must have extraordinary talent, and you will still have to get lucky to win. The game is neither fair nor easy.
Anyone can call himself an artist. and as low as the threshold to entry has become, it is still the talent business and music is the toughest game in town. 100% of the money will be earned by 10% of the artists. 90% of that money will go to 1% of the competitors. The digital age has precipitated many changes on the music business, but it has always been the most competitive environment on the planet, and it always will be. Only the best of the best reap fame and fortune