Sunday, December 27, 2009

The Shift From Music 2.0 To Music 3.0 In The 2000's

The music industry changed in oh so many ways in the 2000's. What started as a decade of business more or less as usual has terminated in a business in upheaval. Somewhere in the middle is where the industry transitioned from Music 2.0 to Music 2.5, then finally to Music 3.0.

In case you've forgotten how I've broken down the era's of the music business, here they are:
Music 1.0 - the first generation of the music business where the product was vinyl records, the artist has no contact directly with the record buyer, radio was the primary source of promotion, the record labels were run by record people, and records were bought from retail stores.
Music 1.5 - the second generation of the music business where the product was primarily CDs, labels were owned and run by large conglomerates, MTV caused the labels to shift from artist development to image development, radio was still the major source of promotion, and CDs were purchased from retail stores.
Music 2.0 - the third generation of the music business that signaled the beginning of digital music, piracy ran rampant due to P2P networks but the industry took little notice as CD sales were still strong from radio promotion.
Music 2.5 - the fourth generation of the music business where digital music became monetized thanks to iTunes and later, others like Amazon MP3. CD sales dive, the music industry contracts and retail stores close.
Music 3.0 - the current generation of the music business where the artist can now communicate, interact, market and sell directly to the fan. Record labels, radio and television become mostly irrelevant and single songs are purchased instead of albums.
As we entered Y2K (don't hear that term much any more) the music biz was sure that it could handle the onslaught of digital music in the form of MP3's. It was convinced that it could combat the piracy, CD sales, while not at all time highs, still remained strong, and radio and television were as important as ever for promotion. We were in the heart of Music 2.0.

2001 saw the first of many daggers to the heart of the music business, this one from an unlikely source - the computer industry - as Apple introduced iTunes. Little did the major labels know what was in store for them as they all made deals with Apple, which then released the iTunes Store in 2003. That was the year the music biz transitioned to Music 2.5 as digital music became monetized for the first time.

Although MySpace and Facebook were created later in 2003, it wasn't until later in the decade that they would become the key to the transition to Music 3.0. By 2007, artists everywhere discovered that they could reach out directly to their fans and their fans could reach back, which was the beginning of Music 3.0 and where we stand now.

Today's artists have so many possibilities that they've never had before, from producing their own music, to finding and developing an audience, to marketing and selling directly to that audience, to listening and communicating with their fans - all with ease and little expense. That's what Music 3.0 has to offer. But it sounds easier than it is, since all these possibilities still require good old fashioned work.

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