The bottom line: downloading music wasn't screwing the artists. It was screwing the recording industry by creating a direct relationship between the musicians and the fans.
Now, Radiohead and other bands are tipping the scales a little more. They are bypassing the greedy record companies and offering their music directly to fans from their web site. Radiohead is offering their new album "In Rainbows" for whatever price you want to pay. Type in your email address and the amount, and off you go.
The music industry has changed dramatically in the last few years. As any poor college student would know, if you can't afford the album, you could download individual songs from Napster, Kazaa, and other P2P networks. Now, you can buy the single of your choice from iTunes.
The music industry made a huge deal out of how much money they were losing to downloading, even when it was legal. Music fans and musicians pointed out that downloading music was akin to trading tapes and CDs of your favorites songs (for those who remember what a mixed tape is). Trading music was the original guerilla marketing: your peers introduced you to new music, which you purchased legitimately at some point, and which prompted you to buy expensive concert tickets. Why would the recording industry ignore such a promising marketing tactic?
Because record companies don't make money off of music you like, they make money off music they can market to many people as they can. Niche markets get ignored. Independent bands get swept under the rug, and big name acts are forced into compromising contracts. And here's the kicker: the recording industry cries out for the lost profits of the artists, but the artists aren't really making money from their relationship with the recording labels. For every $1 song sold on iTunes, a band will only see 8 to 14 cents. Apple keeps around $.30, and the recording label gets the rest.
It's only a matter of time before the recording industry fades into business history like the so much out-dated technology. Selling music - and promoting music - is increasing becoming a field that is dominated by the artists themselves.
