However, I think there is a real decrease in the real value of music recordings. While the internet does cheaply connect fans with musicians in widely different geographical regions, overall the supply of music has gone way up. Why should I pay one band for music when there's another band, just as good, giving away their music for free one click away?

The huge and fatal flaw in that idea is that as soon as word gets around that people have a profit motive to recommend songs from PopCuts, and it will, then any such recommendation becomes suspect. Would you buy a song on the recommendation of someone who you knew was getting a commission for recommending that song? Of course not.

Wishful thinking about human nature, I think. Ain't gonna work. People are ultra-sensitive to that kind of thing.

But you know what, I don't think anything is going to work. Chalk me up in the camp that thinks there are basically two options now for music sales: compulsory licensing (ie, $10/month pass to absolutely everything), or no sales at all.

I think the music industry has a year or two to implement the first option. If they don't, Oink 2* will be born, decentralised, completely P2P and un-shutdownable, and then the age of paying for sound recordings of any type will come to an end forever.

* Oink was a huge BitTorrent site which was basically the best music resource in the world.

Yet advertising still works...

I think their scheme is actually pretty clever. First off, you assume that if people out to make money are willing to "invest" in a song, they are assuming that it's good enough that other people will actually buy the song. Secondly, if you buy the song, you can also make money from it.

The really interesting part will be when someone decides that they want to see how well they can game this system as an investor, especially using some quantitative analysis tools, tracking other high earners, etc. This is mostly assuming that they switch to cash credit vs store credit.

I suppose this is true, if your business model is selling music to people who don't pay money for music. It is also true in software, if your business model is selling software to people who don't pay money for software.

I generally recommend selling software to people who pay money for software. It is probably good advice for music, too. (These people exist! Step away from the techy cocoon and you will meet a whole world full of all types of interesting people. Many of them have strange habits like working from 9 to 5, routinely paying money for goods and services, and using weird non-electronic implements to cause glyphs to appear on paper -- which they sometimes even use for paying for goods and services!)

Maybe it's a more nuanced appreciation of intellectual property rights, or more obscure musical tastes, or wealth, or insistence on the best possible bit rate - I don't know. But I'm telling the truth here.

It's the non techies who don't care about quality and just like the top 40 that do not buy music. All it takes is one person to teach them about BT or - for the real novices - iMeem. I know teenagers whose "music collection" is a collection of links to iMeem songs. I don't know how or why they put up with it, but they do.

This ideal music consumer, who dutifully pays $1/file from iTunes, is in the minority and I'm honestly surprised there are so many even now. You simply cannot stop people sharing 3-5MB files in the age of BT and broadband. It is only going to get easier. In my opinion, the whole model is utterly doomed.

I'm no pirate, but I hope the music industry takes its sweet time.

Radiohead did this because they'd already been successful in the past, that's why fans were willing to pay for their music even if it was given away. It might work for a new band, but if ALL bands are on equal footing, I don't think the income will be as high per band.

I could be wrong though.

That's not necessarily a good thing. It emphasizes musicians who are energetic over musicians who favor craftsmanship. If that's where money came from, we'd never have had latter Beatles, or nearly any classical music.

Hopefully a model is found which lets people make money from sales. Otherwise, music's going to keep plummeting down.

I sound like an old man.

Sorry to repeat myself but the core problem here is bigger than just "people not paying for music". There are many other sectors facing this, perhaps most notably quality journalism. Good news reporting is hard and requires a lot of effort and resources. And the number of people willing to pay for news shrinks daily. Sound familiar?

The core problem is the disconnect between the material and the information worlds in terms of scarcity. Simply put, scarcity exists in the former but not the latter. This leaves anyone relying on scarcity in the latter to generate leverage against the former in a bad position.

This trend is inevitable and, while it might not seem like it right now, good, I believe. Obviously, the best outcome is for popularity to be its own reward - you can see the seeds of this in the open source movement, but it exists elsewhere as well. Social standing is a genuine motivating factor. Absent material necessity, I believe it would be enough.

Still, here we are in a world where we still have to pay actual money for our rent and food. We need a stopgap measure. Elsewhere I've proposed that governments establish "patronage funds" for artists, distributed by popularity. Basically take 1% of revenue and distribute it to artists/authors according to (reliable) measures of how useful their population finds them. In the current economic climate, however, this kind of idea is kind of unlikely.

It's a problem that needs to be solved, though, and it will be solved, somehow.

You mention open source, which is a perfect example. Open source projects are rarely good. Firefox is perhaps the fourth best browser on the market, after Chrome, Opera, and Safari. OpenOffice is terrible. They're popular because most people lack enough knowledge of usability to understand just how bad they are, but they're not very good. At most they're functional.

Patronage does not work in the public sector. That's what private sectors are best for, actually: the people with money to pay for musicians are much more likely to have good taste in what they become patrons of. That suddenly makes it a matter of personal taste, which is a more effective model than relying on the masses, who are almost universally wrong in their choices.

It has a huge incentive for users to behave (I wonder if this would work for HN too):

+ registration is for free, but you need someone to invite you.

+ if you do something that causes you to get banned, the person who invited you gets banned, too. Makes people think a few times before doing something stupid.

The real Oink 2 will be a properly indexed distributed web of trust system using something like BT/freenet and DHT and some kind of reputation system. There are early implementations going in that direction, but nothing really working yet. It's absolutely possible, though. All of the components are right there, just waiting to be linked up.

It's ridiculous to think this isn't coming. It's hard, yes, but it's also inevitable. Any business model that depends on people not being able to easily find and download small files, like say audio or even video these days, is screwed in maybe 2 or 3 years.

I don't think I'm predicting the future here, I think I'm stating the obvious. Hell, I have a side project along these lines, and I'm very far from the only one. Everyone wants something like this. It's just a matter of time.

Of course not? How so?

I don't usually care what the motive is if I can determine the veracity of the information. For example, there are many people who blog about books, with an affiliate-tagged link to Amazon. (I do that myself.) I know they are getting a cut, but a) it does not change the price I pay, and b) if I trust their judgment I'm more interested in getting a good book than spiting someone out of some loose change.

Besides, I take all reviews with a grain of salt, and if I do not know the reviewer I consider possible ulterior motives (financial or otherwise).

Basically, everything on the Web is suspect until shown otherwise. People still find the means to establish trust and reputation and act on shared information.

Would I buy a song on your recommendation alone? No. Would I buy a song that I enjoy that you've recommended, knowing that you get a commission? Of course, why not?