With the promising early dot-com music companies falling by the wayside, who is stepping into the void? Naturally, the record labels, now setting themselves up as online distributors. Not only are individual record labels like AOL Time Warner, Bertelsmann and Universal scrambling to set up their own Napster-like services, distributing their own music on P2P platforms, but the entire recording industry is now dividing into two larger camps for distributing music licenses. The upcoming MusicNet and Duet platforms are supposed to step in where MP3.com and Napster are being forced to step aside. MusicNet (a partnership of AOL Time Warner, EMI, Bertelsmann and Real) and Duet (Universal, Sony and Yahoo) are both setting themselves up as music-licensing platforms that will sell the labels' catalogs for subscription services -- of course, available only in their chosen music formats, and only to carefully approved music services, and only in low-quality streams.
"If you are a small player, you're kind of locked out of the game now," Robertson says, explaining his decision to sell to Universal: "It's shaping up to be a two-horse race: MusicNet and Duet, with Duet powered by MP3.com."
The power, then, is consolidated squarely back in the hands of the same record industry executives that held the reins before. Everyone with a good idea that doesn't fit into what the music moguls have already deemed appropriate is out of luck. That personalized radio station will be shut down, that peer-to-peer network will be decimated before it even has a chance to offer a subscription plan, prices for music downloads will be set sky-high, and new music-exchange services will contain only limited catalogs.
The loser in this equation is, of course, the customer, as the pre-Internet status quo of high-priced CDs and generic radio playlists is simply replicated for the digital age.
Digital music is not dead. There are hundreds of companies that are still innovating or offering new ways to listen to music -- whether online radio stations like those at Live365.com, or small independent MP3 download sites like Epitonic, or groovy technologies and add-on applications like Kick.com. And statistics for Gnutella are through the roof -- according to Clip2, which monitors the P2P service, Gnutella use grew 4 percent in the last week of May alone. Since March 4, Gnutella traffic has risen 400 percent, thanks in part to user-friendly applications like BearShare and the frantic work of programmers who have shored up the technology's weakest links. For every Britney Spears song you can no longer find on Napster, you can find 10 copies on Gnutella.
The prospect of anyone making money off of digital music other than the recording industry that is so successfully defeating the online rebels is a different story. There is no middle ground. The demise of digital music dot-coms points to a future in which the music industry is utterly split between for-profit, label-controlled services, and decentralized distribution technologies designed to evade and circumvent the authorities. How that story will play out is impossible to say yet. Gnutella may eventually succumb to the might of the RIAA, which is already making noises about targeting software developers, ISPs and individual users of the network with lawsuits.
But the Internet itself is fundamentally about making distribution of content easier. If Gnutella falls, another Gnutella-like structure will rise. So far, hackers have always found another workaround. There will always be music-loving programmers who want to continue to innovate on consumers' behalf, with or without the approval of the RIAA; and as long as the record industry continues to exploit consumers and artists, that's exactly what those programmers will do.
The collapse of the independent digital music industry brings us back to the beginning, back to the truly do-it-yourself indie roots of the Net's earliest days. Collective projects that are free from any corporate ties are still flourishing, and small companies with nifty ideas lurk on the fringes. The major record labels, in turn, will do what they've always done: They'll take advantage of their newly acquired Internet start-ups to develop music services designed to reap an already profitable industry even greater profits.
Could it ever really have been any different?
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