Music Business – Will Downloads Be Free?

My prediction: The good old days, when an artist sold CDs or downloads are going to end soon. Most people listen to music with their mp3 players or mobile phones, so they simply don’t need CDs anymore. Of course, as long there are people who like to listen to vinyl records (a growing trend, by the way) or high quality audio from CDs, some sales will remain. Also, by following bands such as Radiohead, who use a model that lets its fans decide if and how much they’d pay for the band’s music, some sales will remain. As it appears, 62% of people who bought the album chose not to pay anything for the download. So what comes next?

Here’s one business model. Referring to Reuters Universal and Nokia agreed that Universal will give customers buying particular Nokia devices unlimited access to millions of tracks for a year. You buy some equipment and in exchange you will get unlimited access to the Universals music library for one yer and you can keep later all you’ve downloaded.

Now indies (and advertisers), pay attention! Another way is that an artist gets paid (other than from live shows and merchandise activity) from ads appearing on artist’s site(s) or even from the ads appearing on a virtual player which artists and fans can export anywhere on the Internet (MySpace, blogs etc). This will help advertisers, too, because they will reach a larger audience. That kind of business model works today at sites such as reverbnation or popfolio (although popfolio is in beta phase still).

So, most likely it’s a question of time as to when the revenue from ads will be big enough to let an artist give his/her downloads away for free. Be honest, even for an artist who is little known, you can download his/her music for free anyway. Be it legally or not.