I think your point of view is too idealistic. You're attributing too much responsibility to the record companies. Sure, a handful of them dominate the market an

I think your point of view is too idealistic. You're attributing too much responsibility to the record companies. Sure, a handful of them dominate the market and their oligopoly has negative effects. But the economic attributes of the product itself is the origin of the current market situation. Consider the following though experiment: People form a club or cooperative. There's a monthly membership fee which is used to pay recording costs for artists, administration (legal fees, secretaries, etc.), and the necessary rights to distribute the recordings to its members. In other words, no large anonymous record company owns the music, anymore -- but just normal people like you an me. But would such a club or cooperative act very differently to a record company? I don't think so: 1.) The club would not allow free redistribution of the recordings. Otherwise nobody had an incentive to be a club member in the first place and the club could not collect enough money to pay artists. In fact, the club would probably also restrict the amount of downloads per month. Otherwise people may be try to become members for a month, download all stuff, and then cancel membership to join another club to do the same thing, again. 2.) The core problem of such a club would be allocation of the collected membership fees. Which artist's music should be bought and recorded? Should the club make lots of low quality recordings or a few high-quality recordings or some mixture thereof? How much money should be spend on advertising of the recordings and club membership? These questions may be answered by some sort of Digg-Style voting but that presupposes that people are motivated to participate. In most cases, though, people have better things to do. This opens a window of opportunity for the most motivated to skew the results, for example, artists. We've seen something similar also happen to Digg. 3.) If a consumer is not sure which style of music and artists he or she likes most, it's most rational to become member of the largest club. In other words, there's also a strong tendency for the large clubs to become the larger, while the small ones are likely to become (relatively) smaller. It will also result in a sort of oligopoly where the largest clubs set the "price" for club memberships. This can also be seen elsewhere, for example in the blogging scene. Although there was nearly no commercial interest in the beginning of blogs, its readership quickly formed a Pareto distribution, as shown by Clay Shirky. Overall, if people would really be concerned about the recording industry, they have all means to make them go away in the near future -- for example, by starting clubs and cooperatives. Most people, however, don't care that much. Otherwise, they would have already done it, right? ;-)