The Future of Music Distribution

The start of musical distribution over the Internet was in play since the online release of Aerosmith's single ''Head First'' in 1996.  We went from retailers like Tower Records to online distributors like iTunes what does the future hold for music distribution. 

Technology and internet bandwidth only seems to be getting better and faster with time.  With faster internet speed consumers seem to gravitate more towards companies like Pandora and Spotify who instantly stream music to a device with few or no hiccups.  This type of distribution has become more and more popular with consumers today for economical and personalization reasons.  This business model is nothing new it already exists in a neighboring market called cable television.  Consumers pay a monthly subscription fee to the cable companies and they provide us with unlimited television. 

The birth of online distribution started with a company by the name of Napster.  Napster eventually was found guilty by federal court which resulted in an injunction.   Back in 1999 Sean Parker from Napster tried to make a last effort deal with the record companies to invest in Napster before the judgment was made by the courts.  Record companies refused the deal in order to shut down Napster and prove a point.  The deal was never made and all Napster users left and dispersed seeking new websites to download free music.

During the Napster age record companies did not want to transition over to distributing music through a peer to peer concept.  They did not believe that consumers would transition from CD’s to MP3’s as quickly as they did.  If record companies would have made the deal and bought Napster they would have had over 25 million users in the palm of their hands.  Fast forward Thirteen years later and record companies are spending millions to have over 25 million users on one site only if they would have made that deal with Napster they would be ahead of the game.

Who knows what the future of music distribution holds, will the record companies continue to devaluate music sales by pricing single songs on iTunes for $1.29.  Will companies like Pandora keep streaming music for free only to sit back and watch the consumer get used to not paying for music.  One thing for sure is that music distribution has definitely created a big problem for record companies.

How do you think music distribution will evolve in the future?