Monday, October 01, 2007

You Tube Killed The Video Star

Or better yet, killed the record companies.

Via Hit and Run comes the news that Radiohead is going to release their new album directly to the public over the internet, allowing fans to pay whatever they want to pay in order to get the album.

Before reading any further here, read the Telegraph piece, which lists five things Radiohead has done to damage the traditional music industry business model.

And now, let me just say that this is awesome. It's good for consumers and music fans and its good for artists and musicians. It's just not so good for the traditional music industry.

The internet has drastically changed the way we enjoy music, from the way we learn about it to how we actually listen to it. And to say that the industry has not responded to these changes ignores the fact that the entire recording industry was built in a way that doesn't reflect the realities of the internet.

This move by Radiohead illustrates the amazing impact of the internet - the democratizing effects of that lower the barriers for entry and allows people to deal more directly with other people.

Let me also use this example to illustrate why markets actually work and what libertarians actually believe in. For whatever reason, people tend to confuse support of free markets to support of big business, but nothing could be further from the truth. Libertarians support the dynamism inherent in a free market that allows people to come up with innovative means of providing other people with goods and services. Record labels made sense back in the pre-internet days, not just for the big money makers, but for smaller niche markets as well. A big label would help market your name and distribute your product to the entire nation, while a niche label could help you in your niche. But when you really think about it, that same structure isn't needed in the internet age. This isn't to say all record labels are going the way of the dinosaur, only to say that music business is changing, and record labels need to rethink their business model if they wish to remain successful. Once again, libertarians are all about markets, and not about big business, so we celebrate these changes and shed no tears for the lost profits of the traditional record labels.

This is big news symbolically, but practically may not mean all that much for the near future. But it will be interesting to watch and as I said, it's pretty damn exciting. If your really interested in music how can you not be excited about a closer relationship between fans and artists?


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