™ Digital & Electronic Music Organization, Inc.
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The DEMO Report 2004By Andre GrayWhen Tim Berners-Lee created the web, he envisioned a decentralized medium that would allow individuals to become independent publishers and approach art, science and commerce as distinctive but related fields, thus unleashing their unadulterated creativity. When musicians discovered the web in the early 1990's, it was apparent to them that they had finally found a medium that could quite possibly liberate them from the shackles of the music industry parasites. It did! For the last seventy years, the music industry has basically the same business model that allowed them to control the manufacturing and distribution of music. And the old adage in Hollywood concerning distribution is true: whoever gets their hands on the money first keeps most of it. For the very first time in music business history, the recording artists could have total control over their creative works and, at the same time, have a direct and interactive connection with music fans from around the world. This is, by far, the single biggest change the music industry has ever seen since the creation of rock 'n roll and the emergence of youth culture itself. It is also the end of an era for the music business as we know it. And for musicians the world over, this is an excellent epoch. Because of the advent of both legal and illegal digital music, the music industry will no longer be centralized. The decentralization of the music industry is perhaps the greatest thing that can ever happen to musicians. It will also mark the end of superficial, corporate pop music as liberated musicians create music from their hearts, not for the sake of fleeting commercial success. Many media and industry analysts have produced their year-end reports in which they praised the success of online music sales in 2003 and go on to make outlandish predictions for 2004 and beyond. And every time they make predictions about future growth of online music sales, most of them are missing a major point: the future of the online music business does not belong to the major labels; it belongs to the true independents led by pioneers like CDBaby.com, Garageband.com, IUMA.com, and hundreds of thousands (eventually millions) of other independents. It's easy to see. Instead of signing with a major label, aspiring musicians will opt for selling their music over the web and they do not necessarily need to go to a major player in order to do so. There are quite a few alternatives available on the web that allow musicians to create their own stores for a nominal fee. The major labels all have excellent catalogs to ensure strong online music sales. But, let's face it, independent musicians can and will create their own catalogs as time goes by. Even though the United States of America is currently leading the world in online music sales, it is Europe who will be the eventual and perennial world leader in online music sales for many decades to come. No one company, or hand-full of companies, will control Europe; rather, she will have several different major players in each country and hundreds of thousands of independent musicians collectively outselling the majors. Unlike North America, Europe will also offer a greater selection of genres and subgenres of music, not only from their own continent but from around the world. This will cause major players to make serious attempts to transmute their cartel practices from bricks and mortar to the Internet by seeking to form unions, useless industry trade groups, and ultimately, try to have laws passed that would make it cost prohibitive (if not illegal) for independent musicians to sell their music over the web. The digital music revolution could also spell the end of the album as an art form and the return to singles as a significant seller. In fact, online singles sales for 2003 in North America outsold singles sold through bricks and mortar by a ratio of five to one. The global music industry is also in its third consecutive year of CD sales decline forcing many independent record distributors and record store chains to file for bankruptcy. Mergers and acquisitions is not the answer for surviving the music business in the 21st century. Embracing technological change as a necessity, treating musicians fairly and valuing the music buying consumers is an excellent starting point.
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