The internet and digital technology are not going to change the music industry as much as we have been led to believe.

1. The Unchanging Future
of Music

2. A Cloud Culture Presentation
http://cloudculturecontent.blogspot.com/

3. Music is an industry that scales.
● The cost of reproducing song files is nearly
nothing.
● There is virtually no quality degradation
● The internet provides a distribution channel that
is global and practically costless.

4. Earnings in industries that scale are
invariably distributed in a power law,
or long tail.

5. Power Law
Image taken from Wikipedia

6. In other words, in something like
the music industry, a tiny number of
musicians account for the vast
majority of income earned.

7. This Has Always Been The Case
For as long as recorded music has been a reality,
the music industry has followed a power law
distribution of income.

8. Why?
Recording is what made it possible.
● Before recording, one artist's music could only
be heard by as many people as could listen to
all the live performances that artist put on in
their lifetime.
● Recording makes it possible for people who
have never seen the artist live to hear their
music; in fact, it allows the artist's music to
compete with other musicians from beyond the
grave.

9. The Fear
We've been told that if the internet takes away the
ability to charge a price for music, there will be no
business model to sustain professional musicians.

10. The Reality
A lot less is going to change about the
opportunities available to musicians than we have
been led to believe.
● Chris Anderson pointed out that “Music
creates celebrity”
● There will still be a tiny class of superfamous
musicians while the vast majority remain
relatively obscure.
● Quoting Anderson again, “there are worse
problems than the challenge of turning fame
into fortune.”

11. The Structure Will Change
The ones that have real cause for concern are the
existing institutions.
● They emerged to minimize the costs under
very different circumstances, and they have no
hope for survival.
● New institutions will emerge to minimize the
costs associated with the digital age.

12. The Practice of Music Will Change
To compensate for the relentless price competition
created by online digital distribution, musicians will
be forced to make their money in areas that do not
scale.
● Live performances and guest appearances
● Funding will come directly from sources like
ticket sales, but also indirectly from sponsors
competing in an attention economy.

13. The Outcome Will Not Change
●A tiny group of musicians will get most of the
attention and therefore most of the income.
●A larger group will be able to make a good living.
●An yet larger group will be able to make a
mediocre living.
●The vast majority of musicians will not be able to
make a living—“don't quit your day job” will remain
a relevant turn of phrase.

14. This is how the music industry
has always been, and how it
always will be.

15. Attribution
The concept of industries that “scale” taken from
Nassim Taleb's The Black Swan, the third chapter.
Chris Anderson quotes were taken from chapter
14 of his book, Free!

16. A more detailed analysis available at
Cloud Culture.
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