For years, some of us have been pointing out that the future of the music industry is fairly simple. We don't need new laws. We don't need to sue people. We don't need compulsory licensing. We don't need to change much of anything, really. All we need to do is recognize the natural progression of economics. The music, itself, since it's a digital good has a marginal cost of zero, and your basic economics tells you that competitive pressure will eventually drive the price of that good to zero. That's not a bad thing. As things get priced at zero they become inputs, rather than end products themselves -- and that can often mean more. In the case of music, free music becomes a promotion for something else, whether it's concerts, merchandise, or something new entirely. People often say this will never happen, but according to USA Today, it's exactly what's happening in China. With copying music so prevalent, artists have learned to adjust. They want their music out there, and they use that promotional aspect to sell more tickets to concerts, to get endorsements and to appear in commercials. So, despite the claims of the recording industry, there's little evidence that all this file sharing actually hurts artists. Who it hurts, of course, are the record labels themselves, who have a history of screwing artists anyway. They set up their business model to be totally reliant on selling tangible goods with music included. As that business model drops away, they're left scrambling. So, once again, these claims from the recording industry that they're only suing everyone to help artists is hogwash. They're simply trying to protect an increasingly obsolete business model.
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