The Music Industry Has Given In

Three of the four major record labels (EMI, Sony-BMG, Universal) have announced an agreement with QTrax, a peer-to-peer song sharing company. This company now has contracts that cover 25 million songs, with several more million to come, pending negotiations with Warner Brothers.

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This might also harm the iPod in the short term, which has a library of only about 5 million compatible songs - apparently, QTrax songs will not work on the iPod. This will change soon, according to the executive in charge of the company.

Here's the thing: musicians make money off of songs and album sales. I get that. I'll never argue that point. But the vast majority of the income for musicians on the Big Four labels comes from concert revenue - not album sales. I'd wager that this is actually true for most artists, even (especially?) the little guys on indie labels. After all, music sharing is a very effective way for lots of new people to hear about an artist and get excited about seeing them live with no direct cost to the musicians, and relatively little work involved.

Album sales, however, drive the revenue of these record companies.

While the RIAA proclaimed to be looking out for artists, in reality, their aggressive actions against music piracy served only to alienate people, rather than encourage them to use different methods of getting songs. Their lawsuits, complaints, and efforts were merely hollow motions designed to protect the bottom lines of companies that continued to follow an outmoded business model.

I say that this QTrax thing is good news. It'd be ad-supported, which everyone can put up with. It provides revenue to artists (read: revenue to these same companies who trickle down 10 cents out of every album sale to artists, or whatever the going rate is). It provides a huge legal catalogue free of the danger inherent in all sharing methods not named BitTorrent. It signals a sea change in terms of business strategies for these companies - soon, perhaps they will become distributors and nimble creatures rather than slow-witted behemoths.

And, best of all, it's just plain smart.