BOSTON, Mass. (U-WIRE) - With more music available on the Internet than ever before, the music industry is adopting strategies to take advantage of the changes.
A new technology is edging into the music industry, the way compact discs pushed records almost out of use over the past decade.
MP3 is a new computer development that compresses music files so they can be downloaded more quickly.
In addition, those who download MP3 files can listen to music on their computers and can also transfer the songs onto an MP3 player. This device is similar to a portable cassette player and allows people to listen to downloaded music away from their computers. It usually sells for about $200.
These developments have caused major changes in the music business, said Jo Sager, executive vice president of marketing for the Rolling Stone Network, a company that manages websites for Rolling Stone, The Source, Down Beat Jazz and JAMTV.
"It's an interesting time right now," Sager said. "In the computer industry, it is what we call an inflection point- a time when everything changes, like the introduction of personal computers or the changes from vinyl to cassettes to CDs."
Websites that offer MP3 files expose music fans to a wider variety of genres and bands than traditional music sources, she said. Many of these sites connect browsers to artist biographies and can customize searches to create a user preference profile.
While computer users may enjoy listening to music for free online, artists and labels face the challenge of making a profit on the technology, Sager said. There are some companies that offer legitimate music files, but some people post pirated songs for which artists are never paid.
"The first issue is the proper payment of royalties to the intellectual property holder. With the MP3 there is no assurance the artist is getting paid," said Mike Farrace, vice president of marketing for Tower Records.
To address this problem, the Recording Industry Association of America is organizing a system in which digital music can be distributed, but those who own rights to the music will be properly compensated, Farrace said.
Additionally, music retailers are still testing the water of consumer interest in online sales. Tower Records, which established a website in 1995 and began distributing music digitally two months ago, is still gauging online sales' success, Farrace said.
"The degree digital distribution pleases our customers will dictate the amount of energy and resources we use to make this possible," he said.
While there is a growing demand for online music, Farrace said it is not clear if it will replace compact discs.
"Part of the music experience is sharing your record collection with other fans. It's a powerful motivator for people to own the physical property," he said.