There's no doubt that the emergence of peer-to-peer file sharing, music blogs and portable media players just a few short years ago launched a digital music revolution. Yet as incredible as carrying around tens of thousands of songs in your pocket is, selling songs via the PC is not likely to be a permanent music business model. What’s next for the iPod and its brethren? A quick look at the devices currently on the market points to a wireless future. Apple's high-end iPod Touch and it's closest competitors, the SanDisk Sansa and Microsoft Zune, all have the ability to acquire music wirelessly -- via either an online store or wireless file sharing. Although these features are exciting for many consumers, they basically constitute a wireless version of the same old same old, and represent only an intermediate step in the evolution of digital music. So what’s really next?
One strong possibility is, surprisingly enough, a relatively old technology: Internet radio. But this isn't your Grandpa's Internet radio. (OK, maybe your older sibling?) A new breed of mobile music service is emerging that blends social networking, smart recommendations and customized radio into an integrated music platform. Having found success online, social music platforms such as Last.FM and Pandora are now taking baby steps into the mobile space. Pandora, for example, has partnered with both AT&T and Sprint to bring their service to mobile phones in the U.S., while competing service Slacker has introduced their own $199 device that allows users to carry personalized radio stations with them on the go.
What makes this new breed of service so compelling is that it caters to the user’s personal tastes. By monitoring the music that you listen to and prompting you to rate the songs you hear, Pandora and its ilk build up a database of your tastes over time. That data is then used to generate playlists consisting of songs that fit your personal profile. The result is basically an Internet radio station that only plays songs that you like, and, the more that you use the service, the more accurate it becomes.
Internet radio is different from terrestrial radio, in that webcasters pay ASCAP/BMI/SESAC for songwriting royalties but they also pay royalties to performers and record labels. This is because of the Digital Performance in Sound Recordings Act of 1995, which established a digital performance royalty for sound recordings. SoundExchange is the designated organization that collects dues and distributes payments to recording artists and labels for performances on webcasts, satellite radio, cable TV, and even for play on services like Pandora.
If webcasting does take off, this could mean a wider distribution of money per play, provided artists and labels are on board.
The best way for indie artists and labels to get paid for online play is to sign up with SoundExchange. Their website even has a searchable database called “Plays” that allows artists and labels to see if they’re owed anything. Well, money at least. To learn more about compensation in a digital world, check out our SoundExchange primer.
Mehan Jayasuriya is a technology and music journalist who lives in the Washington D.C. area. Outside of his contributions to the Future of Music Coalition, he also writes for DailyTechRag and local culture blog DCist. You can visit his personal website at www.mehanjayasuriya.com.