Will We Ever Pay for an Album Again?

You might have dismissed Radiohead's move as just the latest of leader Thom Yorke's wacky anti-capitalist crusades, and Coldplay's move as just clever PR for its new album and tour (and, somehow, Chris Martin's own Fair Trade crusade) — but with NIN now in the game, its hard to argue that this is anything but a harbinger of the future. Had only Mariah Carey given away part of her new album E=MC2 — yeah, like that would happen — this wave would have become instant tsunami.

Still and all, I now think there is no going back. With bands this big now pursuing a whole new "open source" business model with their music, it's going to be very difficult for any group to try to market their new albums through traditional distribution channels using standard retail pricing schemes. And that, in turn, means that the death of the established music industry, which until now seemed like a long slide to oblivion, is now much more imminent.

The simple fact is that you can't compete with free, especially if you are locked (through heavy capital investment in facilities and recording and manufacturing equipment, as well as traditional hierarchal corporate models) into the old way of doing business.

If you can't sell your core product — i.e., recorded music — then you have to make money from secondary sources. In the music world, that secondary business includes tours, promotional items and specialty packaging … all of which are owned by the bands themselves.

The record industry thought that it was the core business and the musicians were merely replaceable content. It was the same mistake made by the newspaper industry … and both have discovered to their dismay that, caught between the bands and Steve Jobs (or the journalist and the reader) they were in fact merely the middlemen. And technology has rendered their role obsolete.

Who's next? Probably magazines. Just look at how Time magazine is now recapitulating the mistakes made by the newspaper industry: getting rid of its best talent, bleeding advertisers, and reverting to shock covers and increasingly biased coverage to hold onto its core readership (and thus compromising its core competency). If you think Time and Newsweek are shockingly thin now, just wait.

Meanwhile, back in the music industry, it's interesting to speculate who will be next to adopt the free download model. Wilco is all but doing it now with its live recordings, as are a number of other indy bands. But if we really are at the tipping point in the story of the music industry, then some really huge pop act will take the plunge next.

Perhaps it will be a teen act, such as Miley Cyrus or the Jonas Brothers. I'd go with Cyrus — in part because she's already made a ton of money, but mostly because she now needs to cement her connection to her adolescent audience as she (and they) transition into adulthood. And, the Vanity Fair shoot aside, dad Billy Ray has been a pretty shrewd manager of her career so far. Hillary Duff should be doing the same. And Britney Spears should have done it with her last album (though she probably needed the bucks).

It's a long ways from Trent Reznor to Miley Cyrus — but then again, it was a long ways too from LPs to MP3. If the music industry has indeed reached its tipping point — and I think it has with this week's news — things will only accelerate as we race into the new, free, music world.

This is the opinion of the columnist, and in no way reflects the opinion of ABC News.

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