At the moment I would say a good tour manager is far more useful than a record label.

Another thing though, you talk about niche and genre, about how record companies need to create and infiltrate communities. What about bands and artists that transcend genre? The Beatles, for instance, were hippy, poppy, hard rock, acid rock, world music. People followed them because they loved them and because they were really good.

My question then is, does the community revolve around the genre? I like music in probably 10 different genres, does that mean I belong to 10 different communities? Maybe, but probably not. I think communities, or “tribes” as Seth Godin puts it, is a great way to look at this, but I think they’re more complex. Also, I don’t think I would trust any community set up by a record company (at least not from today’s industry).

However, even these costs are dwindling as digital studios offer the musician a cost effective means to record their own music.

It still doesn’t replace the traditional studio, but it’s viable.

The “songs as stocks” concept is just that – it’s a concept being tested. Will people pay for a track that they can steal? That depends of what their time is worth. I don’t steal music via p2p, but I know it takes me time to click a few icons, wait for some software to load, search for the track, and cross my fingers that it’s the right quality (or right track at all).

If I’m used to buying a track with a service and it’s more convienient to buy the thing for a buck, I will. And that’s pretty much where the ceiling it for a model like that – songs are free and begin costing money (up to a buck) when they get popular. It’s just a concept at this point.

You’re gonna see a lot of people testing out new concepts like this one to see what works. I just ran into my buddy while getting coffee and he stared me in the eyes and said “how are musicians going to make money”. My response? Everything. By that I meant different revenue streams. Instead of one big load of cash upfront, you gotta set up different ways of monetizing the intellectual property. Any smart business operates this way. If a system like the one mentioned above brings in a little revenue, good. If not, find the one that does.

Also, the author talks about turning iTunes into something like Wallstreet with singles rising and dropping like Google. If the hottest single is selling for $3.46 and I want it, what’s to stop me from downloading it somewhere else for free (or less). Songs are not stocks because you can’t steal a stock (yet, anyway).

It doesn’t make sense to me. Am I just reading it wrong?

Great post, I think your insight into the music industry is on the mark, especially in terms of the multiple business models now on offer. I’m Gareth Reakes, CTO of We7 which I’ve been part of building for the last three years. We7 is an ad-supported music download service which has just celebrated its 2m download and we are now starting to see genuine strength in different economic values and choices for consumers. Like you, we believe that the coming few years will continue to change the industry but it’s exciting to see that some of the record labels are really starting to put the consumer experience and community first.