U2 manager, Paul McGuiness, claims (RS 1114) that ISP's are responsible for downfall of the music industry. That's like saying department stores caused the demise of 8 track tapes, which is completely ridiculous. P2P file sharing is the same thing today that taping an album was 30 years ago. Agreed it’s more convenient and prevalent now than it was then, but it’s not new, and it’s not going away anytime soon.

The standard solution of changing the delivery format won’t work this time around, because there isn’t much quality improvement to be had over CD’s. Value added solutions, such as Tom Petty’s CD with every concert ticket and AC/DC’s t-shirt with every Blu-ray, show potential. Fans purchase the official product to show, and show off, their support.

One reason for the major labels’ decline is greed. CD prices are usually around $10 for bestsellers and each CD has about 14 tracks. The CD price includes the case, artwork, inserts, shipping and the CD itself, with it's high quality audio format. The record company then turns around and sells the same songs in low quality mp3, with no case, artwork, inserts, shipping or disc costs at $1 or more per track. That's greed. If they sell an MP3 album online for half or less of the retail disc price, and tracks at perhaps 3 for $1, the profit margin would still be greater than the profit margin from CD sales.

Another reason for the decline, and this one has been said a million times, is ignorance. Constantly blaming and suing others from on high does not solve the problem. In fact, it has made the situation much worse. People have come to view P2P file sharing as Robin Hood to the evil record company Sheriff. The labels have lost their mojo, lost touch with society, and their coolness factor is now less than zero. Major labels must embrace the internet as the preferred delivery system, if they want their industry back. The labels are already 15 years behind, so it will be hard going, it will take time, and there will be many obstacles to overcome, but it’s the only way.

PM - Sep 2010