MP3: Say Hi -- "Oh Oh Oh Oh Oh Oh"

Before moving on to ideas as to why the internet has thus far failed to provide the world with a mega-star, I want to flesh out some underlying assumptions. I think it's important to understand how the music industry system operated historically in order to see why the internet should be a boon to the music industry.

The basic model that I think most people have of how the music industry worked classically was that record labels, through their A&R people, would seek out talented bands or artists, sign them to a major deal, promote and distribute the album and then, if the artist connected with the collective consciousness, then everyone would get rich - the labels and artists monetarily, and the consumers would have the increased utility of a significant album and all the benefits that come with that.

Obviously, this is an over-simplified and outdated understanding of how an album or single reaches our lives, but I think it can suffice for purposes of explanation. In order to examine the moving parts, its necessary to keep all other parts constant - and I think that example can serve as our constant.

So the underlying assumption that I am making is that this model is terribly inefficient. The classic model relies on very talented A&R at the given label. The idea of the A&R guy who 'has his finger on the pulse' of the consumers is romantic, but ultimately impossible. The collective consciousness of the consumer depends on an unfathomable amount of factors. What time of the year is it? What's the weather like? How difficult is the curriculum in the Minnesota schools - how much angst do the students there have? Is Roger, a taste-maker in Athens, going through a rough-patch with his girl-friend and thus more likely to enjoy a break-up album? There is simply too much information spread out in too many places for one person, or a small team of persons, to be able to comprehend and account for.

So, the basic argument is that the internet should act as a giant information filter. Millions of consumers, surfing the web independently and acting in their own self-interest download artists that they find interesting, and as a result, the best artists and bands should rise to the top. In other words; taking into account the information that can be known only to you - what your mood is, what your financial situation is, your love-life, etc - you choose to download certain songs that appeal to you. Millions of other consumers make the same kind of choices based on information known only to them, what their varying moods are, etc - and eventually trends start to emerge. One band starts to get downloaded more than another. What you see reflected in the fact that this band is downloaded more often is the very complicated web of factors that would be absolutely impossible for one A&R rep to predict. A Hayekian "spontaneous order" emerges naturally and people's actions - uncoordinated by a single actor (like a major label) - lead to the band which most closely reflects the actual collective consciousness of the consumer market, rising to the top.   

In my observations, this is not what is actually occurring in the music marketplace. The choices as to who is pushed into the limelight are still made by small groups of people in major label offices. Why is this? What forces are creating this inefficiency? Most importantly; are we powerless to prevent these decisions from being made for us?