The web is the new record store and podcasting is the new radio. Record companies have to adapt or die. Ahmad Humeid surveys the future music landscape.

A song is just a computer file. Any file can be sent over a digital network (i.e. the internet). You don’t need to know more before you realize that the traditional way of music distribution, and perhaps even the whole machinery called the music industry is in deep trouble.

A few years ago, Napster was the company (or the prototype) that really drove this point home. Here was a way where people could share the music they liked. “Steal music” the record industry would say. The powerful record industry has managed to gang up and kill Napster (now reborn as a ‘legitimate’ company) but internet music exchanges have not stopped springing up all over the place.

Enter Steve Jobs. Who would have thought that Apple, the company that sort of invented the personal computer, would end up also being the world’s largest digital music company, with its iTunes music store and the iPod music player. The record companies were convinced by the very convincing Jobs to hand over their music for him to sell it at 99 cent a song. For them, Apple was a way to test the concept of legitimate digital distribution. Apple’s tiny market share of the computer market made it seem small enough not to be too threatening for the music industry. Of course Apple went on to release iTunes for Windows, and the rest is history. Apple is selling millions of songs a day from its digital music store. The record industry is now pushing for higher prices after they’ve seen Apple’s success.

That’s not the end of the story for the record companies. In fact, it’s just the beginning of what can turn out to be a nightmare for an industry that just a decade ago was enjoying so much dominance.

With the internet as a perfect music (and media) distribution system and with artists being able to set up web sites and their own stores (or even sell their music through Apple directly) why exactly do we need record companies. Even huge, expensive recording studios are becoming obsolete as musicians rely more and more on their PCs and Mac to record and produce their music. Aha! What an interesting situation.

But wait a second! Aren’t record companies in the business of scouting the music scene, selecting the most talented artists and bands and promoting them to us? Don’t we need their specialized expertise to enjoy real talent? Do we really want to go out and scour hundreds or thousands of musicians’ web sites to find a band we like? We NEED the record companies!

The reality, however, is that the music and radio industries have, over the years, worked themselves into rigid formulas that almost PREVENT new, risky talent from emerging. Everything is driven by marketing people who have invented things like Top 40 Radio format for us (which explains why all global radio stations sound the same).

So, with radio’s collusion, record companies have pretty much maintained tight control over what you and I hear and end up buying at the music store.

But something happened over the last year that threatens to close the digital loop and put the music industry as we know it today under more pressure: it’s the podcasting phenomena. And guess who is popularizing it? It’s Apple, again.

Podcasting is radio on demand. You subscribe to professionally produced or home made audio shows that you like and they are automatically downloaded to you iPod or similar music player. Soon everyone will have a digital music player (or a phone capable of that). Radio as we know it today will have a big problem to deal with.

With podcasting, a new, so called ‘podsafe’ music industry is emerging.

So, imagine you’re an artist who, for some reason, can’t get a record deal. You have a really cool collection of songs that you recorded in your home studio. Now you want people to listen to your music. Just bypass all the record companies (what’s the chance of anyone getting a record deal anyway), set up a site, put up some or all of your songs online for download. Then head over to a site like GarageBand or the Podsafe Music Network and put some songs there too.

From the other end, producers of podcasts (the podcasters) will come looking for music to play that won’t land them in jail or get them fined (they can’t play the record companies’ music in their podcasts). If you’re good, your song might be chosen and played on a podcast that reaches anywhere between ten or tens of thousands of listeners. If your song catches on, people might start coming to your site and actually ordering CDs from you directly or paying for downloading songs digitally.

Here comes the beauty of the internet. You might not sell millions of records BUT you keep ALL of the money you’re making. Remember: no middle men! Under a record deal, most of the money a customer pays for an artist’s record goes towards marketing expenses and the salaries of the whole record company organization.

All this might be an overtly idealistic vision. Record companies will not just disappear. In fact they will probably try as best as they can to adapt to the new realities created by the internet, digital distribution and podcasting.

But the revolution is already happening. If you like melodic piano instrumentals, check out Rob Costlow’s site. He is one of the artists who’ve gone the path described above. His music is available both on iTunes and magnatune.com (a record label that embraces digital distribution and a ‘shareware’ mentality). He and others are the emerging stars of the new, networked music world.

As a generation of listeners who grew up with the net takes over, we can be sure that the process of creating, promoting, marketing, distributing, selling and of course listening to music will undergo a seismic shift. Hopefully this will mean more creativity and variety for listeners all over the globe.

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