If you’re interested in digital music, David Byrne’s article in Wired is a must-read.  He highlights the changing economics of the music business and also outlines 6 different models for artists to follow ranging.  Generally there’s a spectrum where the more control you retain, the greater the risks for you, but the greater the potential reward and vice-versa.  Anyway, great article with some good graphics on the economics of a CD, the economics of the industry and audio interviews.  Some choice passages:

We’ll always want to use music as part of our social fabric: to
congregate at concerts and in bars, even if the sound sucks; to pass
music from hand to hand (or via the Internet) as a form of social
currency; to build temples where only "our kind of people" can hear
music (opera houses and symphony halls); to want to know more about our
favorite bards — their love lives, their clothes, their political
beliefs. This betrays an eternal urge to have a larger context beyond a
piece of plastic. One might say this urge is part of our genetic makeup.

…

These models are not absolute. They can morph and evolve. Hausman and
Mann took the total DIY route at first, getting money orders and
sending out CDs in Express Mail envelopes; later on they licensed the
records to distributors. And things change over time. In the future, we
will see more artists take up these various models or mix and match
versions of them. For existing and emerging artists — who read about
the music business going down the drain — this is actually a great
time, full of options and possibilities. The future of music as a
career is wide open.

Well, it’s almost a year after I made my 2007 predictions for digital music.  Let’s see how I did:

1. At least one major label will start offering their tracks for
   sale without DRM.  TRUE.  EMI started it but others are following. 
2. Digital revenues will represent at least 20% if not 25% of a major
   label. FALSE.  It accounts for 15% of Warner Music’s revenues same for Universal.  I did a cursory search for the other two and couldn’t find their figures but I can only expect theirs to be on par or lower.
3. Last.fm will be bought by Google, Viacom or Clear Channel in that
   order for a figure in the low to mid hundreds of millions of dollars. TRUE.  Well it wasn’t any of the 3 I’d mentioned, but CBS turned some head when it threw $275 M down for Last.fm.
4. Pandora will go to the suitor that lost out on Last.fm.  FALSE.  I don’t know if Pandora had any serious M&A interest this year but I’d bet that any such interest would have been doused by the royalty rate issue that webcasters have been fighting all year.
5. XM & Sirius will try to merge.  Terrestrial radio will use their influence in Washington to
   nix this.   TRUE-ish…They’ve certainly tried to merge, and the broadcasters have certainly tried to scotch it, but it remains to be seen whether they’ll succeed (I think the deal will happen).
6. The Sony BMG merger case will be favorably resolved by the EU courts.  EMI and Warner Music will try to merge again.  HALF TRUE.  Yes on SBMG.  Not so much on EMI/WMG.
7. Apple will release their much-awaited mobile phone device, which
   will have modest but not runaway success since only 1 carrier will
   support it and Apple’s various fans will have to wait for their
   existing cell phone contracts to lapse.  FALSE.  I think it’s safe to say that the iPhone is a hit.  So much for my contrarian prediction!
8. Instead, Apple’s iTV product will be the surprise hit of the year.  FALSE.  Again, my contrarian prediction didn’t pay off…iTV is pretty much a failure.
9. Sonos will be bought by Philips, Bose or Microsoft.  FALSE 
10. eMusic will file for IPO  FALSE

So I scored 3.5 out of ten.  Not bad for a baseball player but I guess I’d better keep the day job!