The music industry is a wholly different beast from your father's music business or even the industry that existed at the start of 1990s.  While the advent of CDs and music video brought revolutionary changes of sorts, nothing would compare to what the future held in store in the form of the digital revolution.

From MP3 players like iPods to the complex issues that came with them such as peer-to-peer networks and piracy, to online music services such as iTunes, the music landscape was transformed.  Today, artists get their break frequently, not from dedicated touring, but from posting a catchy demo on MySpace.  Bands sometimes offer free albums for download, or offer exclusive content in digital form.

With these changes has come controversy.  Some of the Digital Rights Management (DRM) software used in the past to manage copyright control borders has been likened to malware.  A vast legal war is being waged against pirates.  And Uncle Sam is looking to gain a bit of extra tax revenue tapping into the vast untaxed online downloads business characterized by the music industry services iTunes and Rhapsody.

Amid this chaotic landscape, DailyTech recently talked to Rich Bengloff, a music veteran and president of the American Association of Independent Music (A2IM), an organization that represents small labels.  A2IM represents such popular labels as Matador, Sub Pop, Epitaph, and Saddle Creek, and thus represents artists as diverse as The Shins, Nirvana, the Postal Service, Belle and Sebastian, Sage Francis, and Bright Eyes.

With his prominent clientele, Mr. Bengloff seemed the ideal person to bounce some thoughts on the digital music industry off of -- someone who was an industry boss still in touch with his independent roots.

One thing Mr. Bengloff did make clear in our early questions is that piracy is hurting independent musicians as well as big record labels.  He stated, "Piracy is a problem for all music creators, large or small... The goal for creators of music has to be to drive people to these legal sources of music and to make sure that these sources of music for consumers properly compensate artists and labels for the use of their music. Unless these entities and the social networking sites, as well as the sellers of music, physical and digital as well as mobile carriers and subscription oriented models properly compensate creators the creation process will decline."

When asked about the recent Jammie Thomas case and other RIAA lawsuits, he made it clear that A2IM does not officially endorse nor condemn the RIAA's lawsuits.  He said that while A2IM sometimes works with the RIAA and sometimes operates separately, most of his constituents do believe in deterrents to piracy.

While A2IM takes no official side on the DRM debate, Mr. Bengloff did warn big labels not to be overly aggressive with DRM, lest they drive paying customers to piracy.  He continued, "The key issue is interoperability so that consumers can enjoy their music where and when they want to and any form of DRM in the marketplace needs to allow this usage or DRM will drive consumers toward greater piracy."

On internet radio, Mr. Bengloff remains concerned.  He is an advocate of internet radio and remains guardedly optimistic that Pandora and other stations will work out  reasonable deals and stay in business.  He remarked:

Like many we were troubled to hear Pandora recently refer to the current situation as a possible 'Last Stand For Webcasting.' As the primary advocacy group for the independent music label community we support a fair and equitable resolution to the webcasting rate negotiations -- a solution that fairly compensates artists and labels for their creativity and investment but still allows the pure play webcasting community to continue to grow. These webcasters need to be supported, as they give independently produced music the opportunity to be heard and discovered, which is all too often not the case at traditional AM/FM radio. The current CRB set rates for thru 2010 are problematic for the pure play webcasters, that said we are hopeful that all parties can get on track towards a constructive solution.

Finally, the discussion touched on the issue of taxation of online music downloads -- a touchy topic both for citizens and for the music industry.  He warned that consequences to the formative online music business may be dire; "Do you think consumers will start paying $1.08 instead of $.99 for a track download?"

A final issue he expressed concern over was the upcoming Orphan Works legislation, which would allow parties to use musical works without gaining rights to use, if they made a "reasonable effort" to find the copyright owner and can show they were unsuccessful.  He said the vagueness of this bill could hurt small independent labels that are less well known.

DailyTech's interview with Mr. Bengloff offered some intriguing perspective from inside the music industry.  It also serves as a reminder of how complex and challenging the business can be.  DailyTech thanks Mr. Bengloff for his time and effort.  Thanks to hard working people in the independent music business like him, while they have to constantly worry about troublesome issues in the music industry, we can, most of the time, just enjoy our music.