A generous fan opts for iTunes. Photograph: AFP
Fourteen years into the internet's existence, and the music industry is still unable to work out a viable business plan to make money from it. Album after album is downloaded for free by millions of would-be consumers who no longer see any reason to pay for music.
The industry's biggest tactical error happened at the turn of the millennium when it decided to apply shock and awe methods to destroy online piracy. It crushed the first peer-to-peer site, Napster, when what it really should have done was to employ the people behind it. A bit more of a rational attitude back then and it could have controlled online music by making it cheap and accessible to all, instead of deciding to sue everyone it could - including fans. Instantly it lost everyone's sympathy. Ever since 2001, it is impossible to reach any conclusion other than that the music industry hates the internet.
The accepted wisdom is that it's the artists who lose out when you download an album for free. But is this really the case? One argument is that downloading has led to a huge boom in live music. It's common now for very new bands to play large venues at an incredibly early stage of their career and to fill them with ease. Why? Because people have accessed their music for free - and therefore risk-free - online whereas it would have taken years to build up the same audience by cd sales alone. The profits made from gigs are far more weighted towards the artist than those from cds, so who really loses out in this situation? Answer: the record companies.
The latest hare-brained plan put forward by Sony BMG chief executive Rolf Schmidt-Holtz to a German newspaper last weekend, following discussions with his peers, is a subscription model whereby the industry, as one umbrella body, will charge users via their internet service providers (ISPs) to download, copy and share music. According to the Los Angeles Times, Warner Music Group are suggesting the price should be $5 (£2.50). One imagines the network they're planning to look a little bit like, erm, Napster circa 1999. Either way, it is a far more acceptable proposal than enlisting ISPs to report on those deemed to be illegally downloading - an idea that Virgin Media is said to be considering.
Meanwhile according to reports, it appears that Apple is on the verge of switching to a subscription model too. Instead of downloading single tracks, in future you'll be able to transfer hundreds of songs and albums to your iPod for one monthly fee - a similar service already exists at eMusic but without the iTunes vast catalogue. The catch is that you're only really renting these tracks for as long as you're a subscriber. It's doubtful you'd be able to share them or burn onto a cd.
Is this the way to go? Are subscriptions the way ahead, and would you pay them? And how is a musician supposed to earn a living? Come to think of it, how is Rolf Schmidt-Holtz supposed to earn a living?
