Change in the Music Industry

For years the music industry made its money primarily through the creation of a physical product — first the record and then the CD. But with the evolution of the digital age, the physical nature of music is fast becoming obsolete. Just at vinyl records hold nostalgic value, soon CDs will be a novel relic of a bygone era.
So is this the death of the music industry? Of course not. Music has been written, performed, and enjoyed for centuries. Music is part of culture. In many ways music as a business is thriving more than ever before. It is a period of fundamental change for this industry.
Those who have a vested interest in the current system of packaging and distribution (that is, the CD) are hurting in a big way. Like many large businesses in a rapidly changing environment, they are stuck. They are the proverbial super tanker that can’t change course quickly enough to avert disaster. They are stuck due to their capital and intellectual investments.
So these big companies react to change like we often see in other industries under going fundamental change. Rather than adapt, they attack the change. They try to hold back the forces of change like the little Dutch boy with his finger in the dam trying to hold back the impending flood. How do they respond to the digital age of music? Do they shift their corporate strategy and change their business model to maintain their relevance and competitiveness? No. They sue 14 year old girls for downloading music.
So how will money be made in the new digital era of music? From a post at TechCrunch:

First, other revenue sources can and will be exploited, particularly live music, merchandise and limited edition physical copies of music. The signs are already there – the live music industry is booming this year, and Radiohead is releasing a special edition box set of their new album…simultaneous to the release of their “free” digital album.
Second, artists and labels will stop thinking of digital music as a source of revenue and start thinking about it as a way to market their real products. Users will be encouraged (even paid, as radio stations are today) to download, listen to and share music. Passionate users who download music from the Internet and share it with others will become the most important customers, not targets for ridiculous lawsuits.

Just as in an industry that is undergoing fundamental change, there are opportunities. It just takes open minds, creative thinking, and entrepreneurial nimbleness to find them.
(Thanks to Andy Tabar for passing this link along).