Will the Internet make the record business obsolete?
In Northampton, Massachusetts, four guys in a punk band named Yanni Difranco dream of becoming rock stars. Their dream, of course, is hardly unique: American cities hum with the hopes and frustrations of thousands of local musicians toiling to capture the attention of entertainment-saturated audiences. But, lately, a new sound is lending an optimistic tenor to the buzz: the whirring of computer hard drives.
Yanni Difranco doesn't have a recording contract, but it does have the Internet—and a relatively new technology called MP3. Shorthand for Moving Picture Experts Group-1, Audio Layer 3, MP3 is only one of several new digital formats that compress sound recordings into compact, CD-quality files that can be saved and played on personal computers. The hallmark of MP3 is its accessibility. Whereas musicians must pay to encode and distribute their songs in digital formats such as Liquid Audio, anyone, with the help of software available for free on the Web, can make an MP3 file from any sound recording-whether it's the local church choir singing "Amazing Grace" or Led Zeppelin performing "Stairway to Heaven"—and post that file on a website. And anyone (again, using free software) can download the MP3 file from that website, store it on a hard drive, and listen to it on the computer's speakers. Or e-mail it to a friend. Or transfer it to a Walkman-style device that plays digital sound files. As Yanni Difranco has learned, consumers have been quick to embrace these options: some 3,000 people have downloaded the band's MP3s since it made the songs available online last March.
Stories like these have caused more than a few musicians, Web enthusiasts, and journalists to cast MP3 as a democratization of music distribution that could topple the $40 billion international recording industry. In addition to the very real threat that consumers will download free, pirated copies of an album rather than plunk down $15.99 to buy it on CD, traditional record labels face the prospect of losing their ability to attract talent. Some major artists, such as the rap group Public Enemy, have already defected to Web-based labels that release music online, and unsigned artists are relishing a newfound sense of empowerment. After all, if Yanni Difranco can sell its CD by posting a free sample on MP3.com, a popular website that features legal (i.e., not pirated) downloadable music, why should the band sign a restrictive recording contract under which it pockets only a relatively small fraction of the profit for each CD sold? According to its most vocal enthusiasts, MP3 promises to completely overhaul the recording industry. "Soon you'll see a marketplace with five hundred thousand independent labels," Chuck D of Public Enemy has said. "The majors can co-opt all they want, but it's not going to stop the average person from getting into the game."
To be sure, MP3 poses some real threats to the big record companies. Online piracy has already proved a menace; last year, the Recording Industry Association of America (RIAA), a trade organization whose members (which include all five major record labels) control approximately 90 percent of sound recordings made in the United States, sent thousands of informational or warning letters to websites that were offering unauthorized digital copies of RIAA members' songs. The RIAA has also spearheaded the Secure Digital Music Initiative—an elite coalition of music, electronic, and information technology industry heavyweights that has been working to develop voluntary technological specifications for every link in the digital music chain, from portable players to file formats that (unlike MP3) will protect music-makers' copyrights.
But, aside from the piracy problem, a number of people in the recording industry actually view the availability of music online as more of a promise than a threat. According to Scott Dinsdale, chief technology officer at BMG Entertainment (one of the five major labels), the Web gives record companies another channel, in addition to radio and MTV, for promoting their products. "We are very excited about [the Web] as a method of creating awareness," Dinsdale says.
Moreover, artists' ability to put songs online doesn't necessarily mean that people will listen to them. With the increasingly overwhelming amount of music available on the Web—as of July, some 18,000 artists had posted more than 100,000 songs on MP3.com's website—marketing, of the sort labels typically provide, may be even more effective in guiding consumers' listening choices. Heavily hyped filtering devices are already springing up on the Web: for example, Rolling Stone magazine's website, one of several high-profile music sites that solicit MP3 submissions from undiscovered artists, features a biweekly list of ten "rising music stars," which the magazine's editors rate on a scale of one to ten (Yanni Difranco scored 5.5). The Ultimate Band List, to promote its own MP3 online talent search, has gathered a particularly alluring group of "celebrity tastemakers," including Joey Ramone of the Ramones and RIAA president and CEO Hilary Rosen, who sift through submissions and select finalists. The prize? "[A] chance for a recording contract with a major label. Then, ultimately, fame, fortune, world domination, and the distinct honor of being known as the first digital superstar 'born on the world wide web.'"
Of course, this sorting process on the Web bears a striking resemblance to the filtering that record companies have been conducting since the inception of the music industry. As a tastemaker for the Ultimate Band List, Rosen recalls, she "spent two hours clicking on song after song" from a long list of artists, often based on "whether a song name was cool or a band name was cool. At that point, it becomes a crapshoot." The gamble is analogous to the one musicians have always taken—with similar odds of success.
MP3 enthusiasts are right to point out one important difference: without the existence of this relatively low-budget, standardized technology, the thousands of artists who submit their music to MP3.com, the Ultimate Band List's contest, and other websites would never get the chance to have their music evaluated, or enjoyed, at all. And, even if a band is not seeking "world domination"—just exposure within its hometown—MP3 and other compression formats allow artists to promote their albums with unprecedented ease. In a posting on an MP3.com online message board last March, company CEO Michael Robertson envisioned the emergence, with the help of user-friendly, affordable technology, of a new "middle class of artists that has never existed before."
But how interested in middle-class musicians would American music consumers be? In a message following Robertson's posting, one MP3.com visitor expressed doubts: "[I]t's just not press-worthy, it's too mundane, where is the scandal, the ostentatious rock lifestyle, the wrecked hotel rooms, the world tours, the outrageous interviews, the drug overdoses & all the other hallmarks of stardom?" Fantasies like these are powerful not only for fans but also for many musicians. As Tao Jones, the primary songwriter for Yanni Difranco (which aspires to nothing less than "world infamy or at least death by vomit") admits, "I'm really just a 30-year-old punk who can't seem to let go of his teen angst and confusing childhood." Even MP3 may have a hard time changing that.
