360 Music Deals – Where Is The Music Industry Headed

The music industry has forever been struggling to find its place online. It has been reported that P2P music downloads are worth a staggering $69 billion in 2007 alone. With these figures being so high and music inevitably going to be moving towards free, where is the music industry going to make their money?

Currently CD sales is on the decline while digital music is taking over. However, digital music sales is not accounting for the percentage lost from CD sales. Major labels count on CD sales for being their main source of income, and if this is in decline and moving online where can they recoup the difference?

Over at Techcrunch and Techdirt they have been talking a lot about 360 music deals and how Warner Music are now signing all their new artists to these types of deal. 360 music deals basically mean they sign artists to complete exclusives and just pay the artist a fixed amount, then the label receives all rights and royalties.

Music on the internet will eventually move to a free model and when this does happen labels will need to make revenues from other streams. Live events and merchandise has long been a steady revenue stream for labels, but soon it will have to become the main revenue stream. Are labels ready for all these changes?