Just as the title suggests, people who think record companies should adopt a model of internet distribution of their music are idiots. Internet killed the record company. There's no doubt that illegal distribution killed the industry but legal distribution will also kill the industry. Legal distribution will only prolong the inevitable. Illegal distribution is just plan stealing and we can see how that will cause mass hysteria in businesses. Legal distribution will kill the business because now, the companies can no longer charge the consumer $10 for an album where the consumer only wanted/liked 3 songs off the album. If you look at the average consumer of music today, you will find that the majority are casual listeners. As all things in life, the common person is the average listener/watcher/buyer/etc. Let's assume that the average consumer will consumer there music through legal means that is to say through the internet. The average listener will only buy the singles. The one song that they like and are willing to spend money on. Music isn't like a majority of goods out there, you can't return it. Once you listen to it, you can't return it whether you like it or not. The average consumer will buy the single and move on forgetting about the rest of the album (good or not). The record label can no longer capitalize on the filler on the rest of the album. Promoting a single takes a lot of money. Hardly any single makes any sort of cashflow. The purpose of the single is to promote the album, that is it's sole purpose. So now that consumers only buy the advertisement, the record company makes little to no profits onmusic sales. This is why legal or illegal distribution of digital music will not help the record companies in any sort of way.
Now, the second argument for digital distribution of music is advertisement. The internet is a relatively free way to advertise your band to (in theory) an infinite amount of people. In that way, the band can bring in money from more music sales, concert sales, merch sales, etc. However, if that is the case, that in the internet is such a great promoter, why even have record companies at all. If you use the internet as your medium to promote your band, you no longer need a record company. What you do need are lawyers for copyright issues; an investor/manager to set up shows for you to sell your entertainment to people. You need a person to deal with the law. You need a person or team to organize venues/contracts and travel accommodation. And if you so choose an investor into recording your songs. However the last thing is optional.
Why is it optional? Your songs are no longer the product. What you are now selling is the show, that is what brings in the money and customers. Your songs are now considered advertisements. So as a rational producer, if you can get away with a cheap but innovative/unique commercial then you will do it. There are commercials everywhere; each one costing a certain amount of money. Regardless of price, some advertisements are just more effective than others.
Let's say you can get away with a dinky 96kbps which brings in x amount of dollars but costs nothing to make. Then you have a full blown production in WAV format that brings in y amount of dollars but costs 10,000 dollars to make. If x> y-10,000, the obviously you're going to go with the dinky recording of your song because in the end you'll be making more money.
So in conclusion, record companies are at its end, regardless if they adopt a digital distribution model or not. Also, sometime down the road modern recorded music will not be the same as today. Who knows, maybe recorded music may not exist.
Sorry no band today, no one's really caught my ear recently. Might I recommend a band called Dovetails, they're mighty tasty
