The Future of Internet Music Distribution

Music distribution using MP3 compression through the Internet has become an important happening and a major concern of the recording industry. MP3 is just one of many forms of compression that is available for audio. At this time it happens to be wildly popular and is likely to remain so. The popularity MP3 is driving changes in the music industry that will bring a leveling of income to composers and performers, increase in their share of gross revenues, and drastically increase the number of composers and performers that are accessible to the music purchasing public.

After MP3 as finished remodeling the recording industry, the recording industry will consist of a three players:

1. Remnants of the current recording industry.
2. Internet companies that sell CDs.
3. Internet companies that sell individual recordings.

First there will be the remnants of the current recording industry. This area will contain the fewest artists and will operate much like today's recording industry operates. The major difference will be that the ease of creating and distributing unauthorized recordings will limit how successful any artist can be. The more successful the artist the higher the percentage of unauthorized recordings being passed around. Efforts to create a copy proof format will fail because at some point in getting the audio from the CD to the speaker the audio has to be converted into an analog signal that can drive the speaker. This analog signal is in the computer in digital form before it is sent to the audio card and can easily be recaptured and converted into any format without loss of quality. In the worst case the line output can be patched into the line input and still have minimal loss of quality. The loss of quality would be nothing compared to copying cassette tapes. And after the first digital copy is made then all subsequent copies will have the same quality as the first.

Next will be Internet companies that handle CDs recorded by full-time professional musicians. They will have downloadable (reduced audio quality) selections from the CD available at their sites. The consumer will listen to the download to determine if they want to order the high quality CD. MP3.com is slowly sliding toward this model.

Finally will be Internet companies handling individual audio files from anybody who has a yearning to create music. These files will be of the highest quality that the individual artist can produce since the file is the product that is being sold as opposed to being a step on the way to selling a CD. These files will be distributed as shareware. Artist earnings will come from shareware payments and more importantly from having their music included in custom CDs where the consumer will pick which audio selections to put on the CD that they order. MP3Shareware.com is a new Internet company intent on capturing this market.

The leveling of income will occur because at the high end the limiting factor of unauthorized recordings will reduce how financially successful any artist can be. The middle and base layers will provide exposure that was impossible in the pre-Internet recording industry thereby increasing the possibility of financial success for more musicians.

In the new recording industry, artists will retain more control of their copyrighted products and receive a larger percentage of the profits. Both MP3.com and MP3Shareware.com offer a 50% split compared to the small percentages now given by record companies.

With the Internet, anybody can put their music online quickly and easily. Mediation sites such as MP3.com and MP3Shareware.com offer several important advantages over private sites such as handling credit card transactions, a high hit rate, and the capability of aggregating many artists to produce custom CDs. Most private sites will simply provide a link to their music on the mediation site of their choice.

Internet audio distribution is providing composers and performers choices that have never been available before.