There’s been a lot of hand-wringing ever since this whole Internets thing started to pick up steam in the music industry. Namely, the recording industry has been fretting over what to do, and how to monetize this whole digital thing.

Ed note: The recording industry is a piece of the music industry – if you’re confused, go look here.

At first the Internets didn’t affect CD sales enough to actually bother anyone, so the strategy was “ignore, ignore, ignore”. The RIAA got all put bull and started bringing people to court over illegal downloading, screaming that the people who were doing the illegal downloading (or rather, sharing songs for others to illegally download) were  responsible for the current state of the recording industry.

Jump forward a few years and nothing really changed. The recording industry was still for the most part refusing to provide legal options to people who wanted to download music, so the public was still downloading illegally, delivering the Internets equivalent of a middle finger to the big bad RIAA, as well as the recording industry.

Then iTunes happened. Suddenly there was a very popular was to legally download music, and people started doing so. Voila, problem not yet solved, but hey – it was a start.

The thing is, the recording industry and the RIAA were now playing two sides, so to speak.  They were getting the revenues from the iTunes downloads, yet still screaming and suing.  The theme as it appeared to consumers was “You’re consuming music in the way you want to, and we’re starting to allow you to do that, but we really want our old way back as we made more money, so we’re still going to whine and complain.”

Businesses have to make money, I get it. Everyone gets it.

What many companies in the recording industry fail to realize though, is that their refusal to innovate and adopt new technologies was effectively a huge middle finger in the face of the consumer. That pissed consumers off.

At the end of the day the consumer wants the music – and we don’t necessarily care about the medium it comes on.  The limitation of choice is what really pisses people off, and that was a choice made by inaction within the recording industry.

Hello to a problem the recording industry helped create.

So today I ran across his gem of a quote on brand dna, and it got me thinking.

“I think records were just a little bubble through time and those who made a living from them for a while were lucky.

There is no reason why anyone should have made so much money from selling records except that everything was right for this period of time.

I always knew it would run out sooner or later. It couldn’t last, and now it’s running out. I don’t particularly care that it is and like the way things are going.

The record age was just a blip. It was a bit like if you had a source of whale blubber in the 1840s and it could be used as fuel.

Before gas came along, if you traded in whale blubber, you were the richest man on Earth.

Then gas came along and you’d be stuck with your whale blubber. Sorry mate – history’s moving along.

Recorded music equals whale blubber. Eventually, something else will replace it.”

The quote started me thinking about everything I wrote above. How if the THING you trade or sell suddenly is made obsolete, you need to figure out a new thing, a new product, or in this case, a new transportation method (from CDs to fiber optic cables).

Directly below the article was an “Open Letter from OK Go, Regarding Non-Embeddable YouTube Videos”.

Do yourself a favor and go read the entire article. It will take you a few minutes, but the letter is wonderfully written and really shows the evolution and struggle of many to monetize this whole Internets thing, while still delivering what fans want.

I’ve included a few excerpts below (emphasis mine), but really, you should go and read the entire article.

Believe us, we want you to pass our videos around more than you do, but, crazy as it may seem, it’s now far harder for bands to make videos accessible online than it was four years ago

The label fronts the money for us to make recordings – for this album they paid for us to spend a few months with one of the world’s best producers in a converted barn in Amish country wringing our souls and playing tympani and twiddling knobs – and they put up most of the cash that it takes to distribute and promote our albums, including the costs of pressing CDs, advertising, and making videos. We make our videos ourselves, and we keep them dirt cheap, but still, it all adds up, and it adds up to a great deal more than we have in our bank account, which is why we have a record label in the first place.

Let’s take a wider view for a second. What we’re really talking about here is the shift in the way we think about music. We’re stuck between two worlds: the world of ten years ago, where music was privately owned in discreet little chunks (CDs), and a new one that seems to be emerging, where music is universally publicly accessible. The thing is, only one of these worlds has a (somewhat) stable system in place for funding music and all of its associated nuts-and-bolts logistics, and, even if it were possible, none of us would willingly return to that world. Aside from the smug assholes who ran labels, who’d want a system where a handful of corporate overlords shove crap down our throats? All the same, if music is going to be more than a hobby, someone, literally, has to pay the piper. So we’ve got this ridiculous situation where the machinery of the old system is frantically trying to contort and reshape and rewire itself to run without actually selling music. It’s like a car trying to figure out how to run without gas, or a fish trying to learn to breath air.

So, for now, here’s the bottom line: EMI won’t let us let you embed our YouTube videos. It’s a decision that bums us out. We’ve argued with them a lot about it, but we also understand why they’re doing it. They’re aware that their rules make it harder for people to watch and share our videos, but, while our duty is to our music and our fans, theirs is to their shareholders, and they believe they’re doing the right thing.

Let me say it again – go read the entire article.

OK Go (or Gizmodo, I’m not sure which) then included the Vimeo video you can see below, and me being a blogger of course put it on this very blog (I dig the song and love the video, so go forth and view).

OK Go – This Too Shall Pass from OK Go on Vimeo.

What’s the conclusion? Well, I’d say right now we’re all in agreement on something at least. There’s far less money to be made from selling CD’s then there was 10 years ago, or even 5 years ago. This Internets thing has thrown a major wrench in the recording industry operations, and labels are suffering.

Is there a solution? That remains to be seen. Companies like Topspin,  TuneCore, Involver, Kickstarter, ArtistData and others are coming out and helping artists (and labels!) better manage things in this whole Internet-driven economy, but these companies are still few and far between in the grand scheme of things. It’s progress, but is it the solution? I don’t think it is, at least not yet.

I’d love to hear your thoughts on things. Do you still buy CD’s? Do you download music from legal online sources? What trends do you see (for better or worse) in the recording industry??