This however should be a cause for celebration for anyone who cares about music as an art form and as a business, because it means that the whole process of making and discovering music is back in the hands of the people that matter - the artists and their audience. Clearly the few remaining people in major labels would disagree, but frankly I cannot get too upset about them - they who spent much of the last decade spending millions and millions of pounds on terrible records that never saw the light of day (Jo Lean and The Jing Jang Jong anyone?).
So why is it such a cause for celebration?
First, it is much easier to make "records", but this can be both a blessing and a curse. The upside is that people who have talent are able to express it far more easily, and with far fewer distractions, and thus more great music gets made. The downside is that all of those people from the "unmade bed" school of inspiration who think all music is art no matter how lacking in talent the perpetrators may be, or how awful the noise is, clog up the digital pipes with a lot of that sort of nonsense.
Secondly it is far far easier to make money as a musician. Now I realise that this may sound counter-intuitive, but that fact is that there are more and more simple ways for music creators to connect with music consumers on a commercial basis, and the process is truly democratic. If what you create is any good, people will want to listen to it, and you will find an audience. If you have an audience de-facto you have a business. For an example of what I mean take a look at www.topspinmedia.com
Thirdly as the traditional music institutions crumble, so the artist is able to retain and "collapse" his own copyright. Now this is where it starts to get really interesting commercially. Best way to explain this is to give an example:
I work with a new band called The Union who have a small but committed and growing audience. The band made it's first single available to anyone who wanted it as a free download. At the same time via their website (using Topspin) they offered a digital EP featuring the single plus a live track and an acoustic track for £1.99. Crucially they also offered the digital EP with a T Shirt as a bundle for £14.99 and over 30% of the transactions took the t shirt option, giving us more than £6 per transaction. Within days we had generated £1,000s of pounds of income for the price of printing a few T Shirts. This may not be as sexy as lear jets and fancy hotels (which was always a nonsense anyway), but you do not need to go much further along than that before the artist is making a living doing what they love. Also, as I said earlier, the democratic nature of the web means that the more people like what you do, the more money you will make.
In short what we are seeing is the emergence of a musical middle class.
It is true that it is now immeasurably harder to achieve global commercial success, but that is not such a bad thing in my book, as hopefully now all the idiots who become artists dreaming of the rockstar lifestyle will bugger off and become hedge fund managers instead.
It is of course utter nonsense to say that bands will stop making "records" or that their audiences will not want to listen to them. You only have to pop into your nearest Apple Store to see what utter tosh that is. What has changed forever is the entire physics of the commercial relationship between the artists and their audiences. This is excellent news for both the producers and the consumers, and the end of the road for all of the middle men and rights owners, and frankly - good riddance.