(updated below for 1/8/07)

So in the last couple weeks we’ve seen lots of discussion around the web regarding predictions for digital music in 2007. Here’s an LMM round-up of the music biz predictions from around the web:

I tend to agree with most of Hypebot’s predictions, as I feel more connected to the independent and DIY bands/artists, and obviously to bands that focus most of their efforts on concerts and touring. So, yes, the DIY model (which will continue to depend highly on a band’s abilities to sell concert tickets and create undergound buzz), will continue to gain momentum.

And although Bob Lefestz thinks the SnoCap/MySpace partnership is irrelevant, I think the idea of selling digital tracks directly to fans is still a great idea that has not fully taken hold, but it needs a better offering than the MySpace/SnoCap option (as I’ve suggested in an earlier posts here and here). Perhaps Musicane or ReverbNation will make some inroads? While I’m no digital music guru, this is an area where I’ll offer my own prediction: one of these players (or a new one) will develop a similar way to offer artists the option to sell concert tickets directly to fans from a website widget or similar service. Nothing crazy or totally original. But given the aforementioned importance of touring and ticket sales for the majority of independent artists, to me, this is a no-brainer.

it’s a long post, but by all means, please read on…

The biggest story and ongoing debate seems to be around the potential of various major labels finally doing away with the copyright-restrictions (aka DRM) on their digital files, and going with the popular MP3 format.

1/8 Update:
Wired just published an in-depth look at this very issue: “Who’s Killing MP3 and iTunes?

The DigitalMusicWeblog has been on this topic almost weekly for the past few months (or maybe more?), and recently donning 2007 “the year of the MP3” and predicting a “big boulder of MP3” will cause major labels to finally acquiesce. The main issue is that copy-protected files are not playable across all platforms. This issue is also known as “interoperability” and has been a pain for anyone without an iPod trying to tap into the iTunes Music Store, or less-annoying, any iPod user trying to make use of Windows Media Audio files.

But as eMusic has found, offering open MP3 files, free of restrictions, can be a winning biz model. eMusic recently hit its 100 million download mark and has done so with a focus on independent music available as MP3s. eMusic’s openness and trust has one over a good amount of fans so that it is now the number 2 digital music store after iTunes, thought iTunes is still miles ahead in terms of numbers. iTunes customers may not know or may not even care that the files they buy are copy-protected (with certain exceptions for burning CDs and sharing files to a certain degree).

But do most music fans and consumers really care? One music blogger Axehole, recently shot back against the plethora of music bloggers compaining about DRM and hailing eMusic’s open model. Axehole suggested that the DRM and MP3 debate was too esoteric for most consumers, way overblown, and was really just secluded to the Internet music nerds and tech-savvy bloggers. I definitely think that a large swath of the digital-music-buying population does not know or care about this issue.

However, though definitely esoteric, this issue is beginning to bubble up to the mainstream, as even the AP recently took notice. And it appears that several major labels may be beginning to change their tune on the necessity of copy-protected files and may even license one of the larger P2P file-sharing applications. Perhaps it has been the success of eMusic, the continued dominance of Apple’s iPod (which plays all MP3s as well as the various iTunes-only formats), or maybe it was a recent interview with Bill Gates, who suggested we should just continue to rip CDs to avoid the problems of DRM-laden tracks (but avoided outright confrontation with the major labels)?

Of course, the reason major labels may give in on MP3s is a mix of all of these issues plus the more important notion that continuing to sell files in multiple formats is just an untenable model that consumers tend to reject. In fact, DigitalMusicWeblog thinks that the major labels offering open formats like the MP3 may, in fact, be THE cure for the recording industry’s latest ills.

While offering MP3s may not convince everyone to start picking up the latest top 40 hits in droves, this take makes some sense. Consumers just want “shit to work” and for it to be as simple as possible, and that points us to the MP3 format (for better or worse). And as more folks continue to go digital, these issues will continue to bubble up as more important and more applicable to most people’s lives when it comes to the music and other content they purchase.

And people are DEFINITELY going digital all over the place. Hypebot and Coolfer reported on the Digital Media Association survey that found this to be the case. And then there’s this latest piece from the Wall Street Journal (no sub required for this story). The article discusses the change in the way that family’s give out an allowance to their children. May seem way off the mark, but what it mentions about kids and how they are continuing to do a large part of their purchasing online, is a key part of this equation. These are the kids that are or will be music fans in the next 5 to 10 years. They will have grown up with iPods and digital music files and will EXPECT all these files to work across whatever platform they use or WILL use in the future. We’ll see what happens, but my prediction is that this esoteric debate over MP3s and DRM continues to bust out into the mainstream and affect various music fans. As people begin to buy new MP3 players, transfer to new PCs, convert from PC to Mac (or vice versa), these concerns over interoperability and what happens to one’s digital files, will become a bigger issue.

With that, I think it’s clear that the smaller, independent outlets will continue to lead the digital charge. It is already happening beyond the eMusic’s of the world:

2007 will definitely bring some exciting changes in the digital music world. I tend to agree with most of the aforementioned predictions when it comes to the promulgation of MP3s. While all these changes will be important for live music fans (as they’re also just generally ravenous consumers of music), here at LMM, we’re more interested in the ways that these changes will alter the live music landscape. But those thoughts will have to wait for another post. For now, check some of this out and get back to us with some comments and personal experiences below.

Here’s to an exciting 2007!


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