The Week on the fall of the music industry

The Week has a briefing on the music industry and why the big record conglomerates are hurting.

What are [artists] doing instead [of signing with big labels]?

They're cutting out the middleman–the record companies–and taking their work directly to customers. It started a few years ago, when such artists as feminist folkie Ani DiFranco began handling their own recording and distribution. Now, a handful of superstars have also decided they can live without a major label. Madonna just left Warner Music, her label for 25 years, to sign a $120 million deal with concert promoter Live Nation, which will oversee everything from record distribution and live performances to merchandise sales. For their most recent albums, Paul McCartney and Joni Mitchell turned over their distribution to a distinctly nontraditional player in the music biz: Starbuck's. "It's a new world now," McCartney explained. "People are thinking of new ways to reach the people."

How is the industry responding?

Not very effectively so far. The industry seems to have devoted most of its energy to largely futile efforts to prevent illegal downloading. It can claim some legal victories, most recently in October, when an industry association successfully sued Jammie Thomas, a 30-year-old single mother in Minnesota, for downloading 24 songs. She was ordered to pay damages of $220,000–or $9,250 per song. But while it's understandable that an industry would want to crack down on people stealing its product, the notion of big companies hunting and suing single moms and students has been a public-relations disaster. Besides, as one music executive told the Los Angeles Times, piracy is impossible to stop. "You can't stomp it out. People are going to get it one way or another."

This quote is sad:

Ringtones, in fact, are now the fastest-growing source of music-industry revenue. "I find myself, when I'm signing a record deal now, asking, 'Can this sell as a ringtone?'" said Steve Rifkind, president of SRC, a label affiliated with Universal.

Is that the record industry's idea of forward thinking?