It consists of three basic elements: those who create the art; those who consume the art; and those in the middle who handle and purvey the art from creator to consumer.

I once read a brilliant analysis by an unknown anonymous blogger who dealt with the role of the middleman in technology. I often attempt to paraphrase his/her thoughts, so these ideas are far from my own original musings, but in a nutshell it concluded that any intermediate role was necessarily fragile and transient, that a salesman or broker must always be ready to move turf and seek new things to sell, new ways to fit into the gap between producer and consumer.

The old industry certainly did create a lot of wealth. The glory days of the film and recording business 1940s through 1990s employed millions with diverse job specialisations and attendant support industries. And technology came and changed everything. As you suggest, technology is always a mixed blessing in this regard, new efficiencies shrink the industry. Technology does put people out of work, and in the same stroke it creates new employment opportunities. A great saying I once heard from a genius programmer is that the job of a programmer is always to replace himself with a small piece of code. In other words, to cut his own throat, put himself out of work so that others do not need to tread that path again. It is enshrined on the T-shirt slogan “I wrote code so you don’t have to”, a parody of a wartime poster. I think many times in my career I have been “disintermediated” by my own hand, something to be proud of rather than a foolish mistake. There are always fresh challenges on the horizon and I think it’s the worst kind of coward who deliberately creates and perpetuates a status quo requiring their employment. Douglas Adams nails this down so eloquently with the “Philosophers Union” who demand Deep-Thought be switched off lest it actually discover the answer to “life the universe and everything”.

There is the same weak minded conservatism in the RIAA, evident by way it has manipulated its own image to remain relevant. The original mandate of the RIAA was technical. To standardise the grooves, needles and filters used in the vinyl disc cutting process, but it has transformed into a monster. Its fearful position is terrorised by every new development threatening change and obsolescence. It is graceless and ugly, like a 150 year old man kept alive by tubes and machines in a hospital bed. Nature implores it to die, but it will not step through the door.

The new system could generate wealth for the artists, as well as for anyone who adds value to the art. Value could be added by a proliferation of home recording studios, and “broker” web sites.

That value is the process of selection and quality control. Nobody has time to listen to every band on the internet that offers a website. The vast majority of them are very poor. At the peak of the recording industry it served this well. There were A&R men who were themselves trained and accomplished musicians trawling the clubs looking for exceptional talent. An important step in the demise of the music establishment was removing those foot-soldiers, relying instead on a marketing model. They moved from a pull (demand driven) mode to a push operation in which they saved money by reducing the number and diversity of acts and creating/forcing a market though hype and image manufacture (1970s – 1980s). Stepping into this void came the DJs who led the post 90s dance movement. They took over role of filtering, quality control and aggregation of the underground. But they remained under the control of the MAFIAA who merely used them as outsourced/contracted A&R people while keeping a stranglehold on the deals (contracts) and hence intellectual property. Another way they once added value was artist development. By providing education and training, mentoring, singing lessons and so forth they allowed their acts to blossom. Unfortunately (1980s – 1990s) for them, accompanying the availability of cheap recording technology they also over-developed them into independent actors who usually broke with their company after the second album and started their own solo career, for example George Michael. They needed to keep the artists hooked on the drug, so that had to stop. Nail number two in the MAFIAA coffin. This came about during the period in which the small and medium sized independent recording studios were also squeezed out by technology advances and a diminishing pool of potential clients as the industry underwent its next fragmentation into a small set of carefully managed and manufactured “superstar” fake artists (Spice Girls, Beyonce etc) and an underground scene. This remains the current state of the MAFIAA music conglomerates. Huge scale marketing operations that require absolute conrol over the channels of dissemination. The traditional “band” has been replaced by manufactured acts comprising compliant wannabes recruited from TV talent shows. But the underground continues unperturbed and as you say, small home studios and broker websites now form the infrastructure of the next wave waiting in the shadows. This is your invisible hand. Nobody really wants the dull and lacklustre manufactured acts foisted upon us. Right now the only thing that keeps the machine running is the illusion of the “deal”, the wannabes holy grail. Once the artists wake up to the evils of record companies (that the deals actually designed to silence them and focus the artificial market) we will see change.

“A few years hence, will there be a band whose name becomes a household word all across the planet, who were made wealthy by a song recorded on a cell phone and uploaded to their own initially obscure web site?

Absolutely. I believe it’s already happening and will become an irresistable force. I believe interesting things are afoot. We will see amazing stories of bizzare things happening, like a band who one day say “Whoa! stop sending us money now, we made millions thankyou very much, now give your money to other bands or we will just donate the rest to charity.” (The problem being that until you “make it” you get no money worth mentioning, and when you
do you quickly accumulate more than you know what to do with). Finding a balance that allows a large number of fairly good acts to make a reasonable amount of money (as opposed to a tiny minority of very wealthy acts) is a challenge that will face the new music industry.

“When I love a piece of art, I feel happy and grateful and generous, and would gladly give money to the artist. My favorite band, whose lead guitarist passed away in 1995, has an online store that enables me to buy concert recordings from 30 years ago.”

Precisely, I agree, and we are not alone. When I find artists who I truly appreciate I am moved to pay back in some way. I think this is universal and I have some optimism that human nature can make a new model possible.

“…perhaps it could be a cell phone recording of a spontaneous anti-war jam by a group of friends at a party, uploaded to the Internet, and distributed enthusiastically by many people. There is no revenue model at all, just a pure distribution of art from creator to consumer. But somewhere in between the old and the new is where the bulk of the creation and consumption of art will occur.”

This already happens. Think of Weebles cartoons and famous YouTube videos like the “Star Wars Kid”. But that is not industry, it is real culture (with potential secondary effects). The proponents either make capital by gaining recognition and employment, or in the latter case they even find the attention overwhelming and unwelcome.

Government regulation is also a powerful factor.

This is where I put on my tinfoil hat again. Call me a loon if you like, but I seriously believe there are ultra-conservative forces who seek to manipulate culture for purely political reasons. Music and film can be dangerous. Right now the MAFIAA serve those interests very nicely. Look at the way the Dixie Chicks were chastised and pilloried for speaking out on the Iraq war. Since then their careers have been actively sabotaged.

Adam Smith’s metaphor is that an “invisible hand” guides the evolution of the marketplace.

Thanks for a positive and optimistic response. I am aware of Smith’s work, though the role of the “invisible hand” is wisdom I had forgotten. You are right, we should focus always on the future and best way to hasten the death of the MAFIAA is to ignore them away. Though the Svengali, the culture-conservatives and the Philosophers Union are disgusting and sad people whos minority interests have destroyed much valuable culture, remember the words of another great mind who said, “The arc of history tends towards justice”.