How will musicians get paid in the 21st century?

Listening to music is one of my favorite hobbies. Today, though, I find myself wondering how all the bands I like can possibly make a living in the post-CD music world, where entertainment choices abound, mainstream radio is a graveyard and paying for music seems passe to some.

The changes remind me of a famous prediction Esther Dyson made twelve years ago, in an article that originally appeared in "Wired" magazine. Said Dyson:

In the new communities of the Net, the intrinsic value of content generally will remain high, but most individual items will have a short commercial half-life. Creators will have to fight to attract attention and get paid. Creativity will proliferate, but quality will be scarce and hard to recognize. The problem for providers of intellectual property in the future is this: although under law they will be able to control the pricing of their own products, they will operate in an increasingly competitive marketplace where much of the intellectual property is distributed free and suppliers explode in number.

Sounds like a pretty accurate description of today's music environment, doesn't it?

Thinking about it this way, there's very little that major labels can do for the vast majority of musicians. The main value they had in the past--paying for expensive studio time, maintaining relationships with retailers, influencing radio airplay--have much less value today given technology advances and the homogenization of mainstream radio.

What can be done? How can musicians survive in this scary new business? This Wall Street Journal article describes how bands can develop a following online. Yet they're still not sure how people can make a living.

There is a way, for those bands enterprising enough to create a business around the fan base they build. Independent bands like Clap Your Hands Say Yeah, Dr. Dog and Brookville have had success (meaning making a living, not becoming rich) through taking control of their own careers. Aimee Mann, Michael Penn and Ani DiFranco have also done well outside the music mainstream. It's a lot of work, but you can make a living. You just can't leave the business side to someone else.

Here are some suggestions at how to make a living making music:

use the internet to build a fan base (the WSJ article, here via the Pittsburgh Post-Gazette is a great primer on this)
record and produce your own material
own your master recordings
hire a label, if you need to, to distribute your record
tour a lot and make sure you make money off your touring
license your songs for films/TV/whatever

It's almost a bigger challenge for listeners. How will you find the best music if the major labels can't or won't bring it to your attention? Here are your keys:

subscribe to satellite radio
seek out tastemakers for the kinds of music you like (for me, the main ones are Nic Harcourt of KCRW in Santa Monica and John Richards of KEXP in Seattle) and subscribe to their podcasts
invest in bands you like. Buy their CDs or pay to download tracks
go see bands live
when you hear something you like, tell your friends

It will be fascinating to look at the music business ten years from now. I'll bet it looks completely different.

marketing, innovation, music, strategy