The music industry is in trouble. Technology news sites and the tech blogosphere are buzzing about a new music blog/business model that might save it.
Somebody Has to Pay
A company called RCRD LBL (pronounced record label) launched today. Peter Rojas, who founded popular gadget blogs Gizmodo and Engadget, created RCRD LBL to satisfy users’ appetites for free music and to make money from this something-for-nothing propensity. (I’m guilty, too!)
RCRD LBL will pay artists an advance for the use of a limited number of songs and generate revenue through advertisements on the blog. Users will get to download free, legal, and DRM-free (digital rights management) MP3s. Sounds good, if the company can keep a steady supply of both advertising clients to pay the advances and artists willing to offer music.
Will this business model work? If artists and labels keep up the pressure on illegal peer-to-peer file sharing networks and users grow weary of DRM-burdened music files on legal and illegal download sites, probably. Advertising on the web is growing, and RCRD LBL may have hit on something potentially big.
RCRD LBL might work out better than Rhapsody, a subscription-based online music service. Rhapsody has licensing agreements with artists and labels and pays for the use of their work. Users can stream music for free over the web (a limit of 25 songs per month; unlimited song streaming for $12.99 per month), but they have to pay a monthly fee of $14.99 if they want to download songs. Or users can opt to buy music (typically 99ยข per track or $9.99 per album) without joining.
RCRD LBL users can download music for free. Rhapsody users can’t. There are illegal workarounds, of course. For instance, you can record and capture streaming music online and save it to your hard drive with the right software.
If You Can’t Beat ‘Em…
The Internet has produced good things. To quote myself:
The Internet has revolutionized retail. It’s also changed the way people work and play. To be sure, the Internet has its drawbacks, but that’s the risk of revolution. The good news is that we’ve only begun to reap the benefits of a world untethered from traditional selling, marketing, buying, and consuming.
The Internet has made it easy to violate and get away with violating copyright laws. It’s almost too easy to misappropriate someone’s work. Whoever runs a site like YouTube, whether it’s a few people or 100, can’t keep up with all the copyright-infringing uploading and downloading. The solution is for YouTube and copyright holders to create content agreements. YouTube pays an artist, music label, or TV network for the use of copyrighted material. When users upload or download a CBS news clip, or example, or a music video, it’s all legal.
It’s the smart way (and only way?) to do business in the digital age. Somebody ought to tell Prince. 
You can’t stop progress. Expect to see more companies like RCRD LBL spring up. If the business model works the way it’s supposed to work, we’ll all get what we want.
Later…Check out Listening Post’s interview with Peter Rojas.
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