The fight in the music industry is about where the money flows, not the quantum

By April 1, 2010 No Comments

Mike Masnick has a post up on Techdirt with this great description of the changes afoot in the music industry (emphasis mine):

You may have heard that the music industry is sort of falling apart. It isn’t really a matter of there being less money in the pool – just that the money people have to spend on entertainment (which will always be somewhat of a constant) is just being diverted away from where it historically has gone (record labels and managers). The music industry is by definition an operation invented to divert money spent on music away from actual musicians – the problems that the music industry is currently facing have specifically to do with the fact that the money that would usually flow directly to the bigger economic actors is now going somewhere else.

In other words the size of the pie remains the same, but the internet has disrupted the status quo for how the pie is split up.  Labels are suffering and bands who rely on labels rather than sorting themselves out are also suffering.  Put this way there is no crisis for music as such, just a period of re-adjustment during which the bands will figure out the new way to get their share and the labels may or may not (probably not in my opinion, particularly given the news about EMI this morning) be able to continue making a handsome profit by facilitating the flow of cash from consumer to artist.

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