The music industry is in the midst of reinventing itself in the face of tectonic shifts brought about by the impact of open web, broadband, social networking and mobile techonlogies.
Napster, the first major music sharing service, started it all. Its quick rise and subsequent demise offers many lessons to industry execs and entrepreneurs alike. In hindsight, it is clear to me that the music industry would have been better off trying to leverage Napster rather than kill it. Through napster customers were clearly signalling the need for a frictionless way to acquire, listen to and share music. But the music industry execs chose to ignore these signals and instead focused on protecting the old way of controlling distribution by using the legal means to kill napster. They surely succeeded in killing napster, but failed in controlling distribution. You can not fight nature.
Steve Jobs surely paid attention to these signals of customers and created the itunes music store which made it very easy to acquire and listen to music. Ironically, the music industry which was trying hard to retain control unwittingly handed it to Steve Jobs. But despite its success, itunes is not about the open web. its more about controlling the user experience.
There are many services that leverage the open web to make it easy to discover, experience and share music. Here are some categories that have emerged over the last few years.
Music stores:
These are places where you can purchase music (such as itunes) or subscribe to music (such as rhapsody). A new startup called lala.com is trying a new business model where you can purchase a song stored in the cloud (they call it web song) for 10c, where you can listen to it on their website.
Myspace, a popular social network, launched its own music store called Myspace Music. Facebook is rumored to be looking to offer their own music store.
Music recommendation sites:
These sites (such as last.fm and pandora) help you discover new music by recommendations based on the music you listen to.
Music Social Networks:
Imeem is an example of music social networking built around legal sharing of music with your friends. It offers free ad supported streaming of music.
There are pouplar music sharing social networking apps such as ilike that allow facebook and myspace users to share music with their friends.
Music Blogging:
Hypemachine tracks all the music blogs and lets you listen to the songs being discussed.
Music playlists:
Muxtape was a popular site that allowed you create the webversion of a tape mix and share them with your freinds. It was shutdown because of legal pressure from RIAA. 8tracks is another site offering a similar functionality.
As you can see there is a lot of innovation taking place where the web meets music. Music industry should leverage this innovation in stead of feeling threatened by it. Their survival depends on it.