This was written in 2000, as Napster and a variety of online music sites were shaking up the business. SF Bay Guardian Arts Editor Tommy Tompkins and I would get together for lunch pretty regularly after I went to work full-time for listen.com, and we’d talk about what was happening to the music business. So it made sense that eventually he asked me to write him a longish piece on it all. Nothing too embarrassing below, I don’t think, almost a decade and a half later, which isn’t too bad, when pontificating about what the future will or won’t bring. The week this ran I got an email from Hillary Rosen, the much-vilified head of the RIAA at the time, telling me she liked my article and liked Negativland. I think my only reply was, “Please don’t break the Internet.”

The music business has witnessed so many stunning developments in the past few weeks that this very sentence will probably go out of date before I finish typing it. One minute Metallica’s suing Napster, then before you can say, “What dickheads!” they’ve collected the names of over 300,000 Napster users they accuse of illegally trading Metallica tunes. A few days after a federal judge rules that Mp3.com’s Beam-It feature violates copyright laws, the company announces a new subscription service for classical music lovers, and five minutes after THAT Universal and Sony decide they, too, will develop a subscription-based service for people seeking downloadable music on the internet.

Record companies are terrified, entrepreneurs are thrilled, and most musicians are confused as hell. There’s a major transformation underway in the music business, a shake-up so big pundits are resorting to phrases like “format change,” “paradigm shift,” and, creepiest of all, “new revenue streams.” Since I still cling to some of my punk rock ideals, I prefer the word revolution, but I should make it clear at the outset here that I work for one of the dotcoms hoping to capitalize on this brave new world.

Because the revolution has just begun and nobody has a clue how it’s going to end, there’s a heady atmosphere of hope, fear and greed swirling around everyone jockeying for position in this space. Some people insist digitally distributed music will shift the industry away from long-playing formats like LPs and CDs, and move it back to a single track orientation (I’ve heard folks say we’re returning to the days of 45s, and I’ve heard others say it will be more like the days of sheet music). Some people mutter that the changes will be deeper and more severe — they foresee piracy becoming so pervasive that no one will be willing to buy music anymore.

There’s a bizarre, loveable chorus of voices singing. One moment Chicken Little takes the lead, but before you know it you’re listening to Candide. CD’s are going to disappear, and so are brick and mortar retail outlets! No, no, downloadable music is going to spur traditional CD sales! My favorite line of all so far comes from no less a personage than Seagram’s chief exec Edgar Bronfman who, in a statement that seemed goofy but was actually kind of bold, proclaimed, “We need to stop thinking about selling round things.”

The curious thing about all the chatter is that, even at its most forward-thinking, most of it remains wedded to the idea of music as a commodity. When analysts and panelists do bother discussing musicians and their audience, it’s almost always in terms of whether the former is going to get screwed and if the latter can be convinced to stop stealing (and, if audiences can be convinced to keep ponying up the dough, who stands to get the biggest cut). But in all likelihood, the most interesting effects of the coming business shake-up are going to be artistic ones. They will indeed be profound, but they will also be a lot more subtle than most people currently suspect.

Here’s a true story. Like most true stories, it’s amazing in a very matter-of-fact way: I recently overheard two young (18 to 25 years old) men discussing how big their music collections were. The guy who won, the guy with the biggest collection, did not say that he had thousands of records, tapes, or CDs. He said, “I’ve got over 70 gigabytes of music on my hard drive.”

That’s over 1300 CD’s worth of songs residing, for all intents and purposes, in space. It’s difficult for people like me who grew up staring at cover art while we spun LPs to understand the appeal of that, but it’s not too hard to guess just where it leads. Napster and Mp3.com might get sued out of existence, but the technology can’t be disappeared. The smartest labels will adapt, because eventually everything ever recorded will be available online, legally or not. People are going to get very used to hearing what they want, when they want. And as our relationship to music changes, so will the music itself.

The utopian version of what’s currently going on plays out something like this: idiosyncratic geniuses who can’t get past such traditional gatekeepers as A&R guys, radio programmers and jaded music journalists can now make their music available on the internet, where kids in North Dakota towns with no cool record stores can find it, grab it, and then start sharing it with friends across the globe. In another scenario, consumers who really want that Shania Twain song they heard on the radio don’t have to drive to Tower, look for a parking space, remember the title of the new CD, wait in line, then plunk down a twenty and shake their heads at how little change they get back. Instead, they can buy the one track they want online for a reasonable fee and start singing along almost immediately.

The dystopian version isn’t all that different from the first, actually: people who consider themselves idiosyncratic geniuses put their music on the net along with 35 million other wannabes, where it continues to be ignored by kids in North Dakota towns which actually have one cool record store, only the record store now has a Going Out of Business sign on the door because everybody’s using Napster to trade songs for free. All the good bands starve, and Shania Twain gets to keep making music because it’s gonna be another couple of years before the bulk of her audience figures out this internet stuff.

The current state of affairs, as it happens, is a little bit closer to dystopia — the vast majority of what’s legally available either costs too much, takes too long to download, or is of dubious merit, while most of the real action involves college kids trading stuff that’s already popular (I’m willing to bet that young man with 70 gigabytes of music has the new Smashing Pumpkins record on his hard drive; I doubt he’s got the new Ass Ponys. Either way, I’m sure he didn’t pay a penny for any of it).

But as I said, the revolution just started, and I can’t help thinking that kind of access to music is bound to transform people’s listening habits. Complaints that kids using Napster are stealing miss an important point: these are very casual thieves, in no hurry to get out of the store. They spend a lot of time looking around for just what they want. They’re browsing! Music is important to them and they’re sampling what’s out there in a manner that’s never before been possible.

Right now, we’re accustomed to going through several steps before “owning” a song. Maybe we hear it on the radio and decide we want to hear it more often. Then we have to go buy it. Maybe we drive to a store, or maybe we type in the title at amazon.com and check our mailbox every few days. Or maybe we have a friend tape it for us. But eventually it’s ours, and we can hear it whenever we want. If we have the CD or the tape close to hand, that is.

Very soon, however, there will be virtually no lag between thinking about a song and being able to play it almost anywhere. Even now you can buy portable mp3 players with four gigabytes of memory, which is the same thing as carrying around a Discman and almost 80 of your favorite CDs. But imagine a day when even the player is redundant, when literally all songs are stored somewhere on the internet and wireless technology means you can type the name of a band or a song or an album into your dashboard or some handheld device at the beach, and hear absolutely anything you feel like.

What will people choose once they have instant access to everything? The cynic in me says, oh shit, another century of classic fucking rock. But that voice gets shouted down by a more optimistic one, and the more optimistic one wins because just as things are changing for fans, they’re changing for artists, too.

Many artists have sensed the astonishing impact file sharing applications such as Napster will have on the music business. So far, however, most of them are swallowing the RIAA’s party line: musical compositions are intellectual property protected by copyright law; trading them without remunerating the copyright holder is akin to piracy; applications such as these are therefore the enemy. Again, though, that logic begins with the assumption that music is a commodity which is supposed to be bought and sold. Of course songs are the intellectual property of their composers, and of course they have value. But saying something is valuable is not the same thing as saying you must pay for it.

Applications such as Napster and Gnutella force us to question the value of a song. What’s a hit single worth to you? One dollar? Two dollars? Sony and BMG say they plan to charge around three dollars a tune when they start selling downloadable music (mostly, I suspect, to keep the Tower’s and HMV’s of the world happy). Some web sites sell songs for fifty cents, or ninety-nine.

Personally, I’ve always thought songs were priceless. That’s part of why I’m convinced the vast majority of musicians stand to gain more by distributing their music themselves, for free if necessary, than they do from agreeing to let record companies distribute it for them at an outrageous mark up. It’s a sad reality that after the average musician on a major label spends his big advance, he will never see a penny in royalties, anyway.

(Disclosure number two: I work for a dotcom now, but I used to be in a band that released records on indies and on majors, so it’s entirely possible that everything I’m about to say is a wish rather than a prediction. The thing is, the system didn’t really treat me too badly — my band didn’t win the lottery, but we did go home with some pretty nifty consolation prizes, including a hefty publishing advance, an opportunity to spend what we thought it would take to make the records of our dreams, and a slew of “I got drunk with famous people” anecdotes which I firmly believe are worth more than that publishing advance, seeing as how I still have them.)

So here’s why I say the future will be both boring and beautiful: major labels are not going away, and neither are managers who get 20%, or $200-an-hour lawyers who tell you the label just won’t budge on the packaging deduction. The things they say as they smile at you will change, but they’ll still be making sure their own pockets are lined first.

However, the music business is going to stop being an either/or proposition. Once you give every band in the world its own distribution channel, hooking up with a label becomes an option rather than a necessity. There will still be blockbuster acts, but I suspect we will need these more for cultural reasons than business ones — because the digital distribution of music’s true beneficiaries are going to be the bands and labels who figure out how to harness the internet’s uncanny potential for niche marketing.

It’s going to be much more possible for bands to support themselves without shifting a million units — maybe they distribute their work for free and support themselves touring and/or selling related merchandise such as T-shirts, or maybe the music “feels free” to the fans who download it, but the bands get paid by performing rights organizations such as BMI and ASCAP who collect licensing fees from Napster or AOL or whoever’s making money gaining eyeballs (and eardrums) by offering people access to the music they want.

That’s not some pie-in-the-sky scenario: the high muckety-mucks at ASCAP might be pretending they’re on the RIAA’s side right now, but at least a couple of visionaries within the organization are developing a passive technology that will basically watermark digital audio files so that their every movement through cyberspace can be tracked. Unlike the Secure Digital Music Initiative, which attempts to turn songs into locked boxes that can only be opened by their rightful owners (and any maladjusted hacker who relishes a challenge), watermarking begins with the assumption that digital files will be freely traded, and simply tries to count how often each one is being used — it’s a very fancy meter reader. And if you know anything about the archaic way performing rights organizations track airplay now, you won’t waste any time complaining about Big Brother; you’ll just want to know how soon watermarking will be operational so your group can start getting its fair share.

Are you likely to make a killing this way? Not very. But you will, if you want, be able to make and distribute work that does not touch a universal chord, find an audience that shares your interest, and build that audience over years without anyone asking why you haven’t recouped yet. With a little legwork and a modicum of savvy, bands with any talent will be able to find an audience large enough to maintain them without signing away their lives.

A lot of people roll their eyes at the hobbyists filling up open directories such as Mp3.com and Riffage, but I think they signal a real shift in how musicians are going to think about what gets presented to an audience. At my company, writers listen to downloadable music nine hours a day, five days a week. If you want to get a comprehensive sense of what’s going on — as opposed to what A&R guys and program directors hope is going on — we’re the ones to talk to. We can’t tell you what’s the next big thing, but we can tell you what’s really happening, whether or not it’s marketable.

Sure, the internet is littered with plenty of half-assed demos by teenage garage bands, painfully unsexy R&B crooners, and rhythm-challenged rappers all dreaming of fame. But there are also hordes of people making music just to hear what it sounds like. You can find a couple thousand bands who worship Ween and Frank Zappa. You can find hundreds of young teens praising Jesus in voices as sincere or saccharine as you prefer. You can find rhymes that boggle the mind, loop libraries, instrumentals waiting for lyrics, soundtracks for video games that don’t exist, a cappella versions of old Toto tunes, Japanese bluegrass bands, Italian hip-hop acts, early music ensembles playing crumhorns and bombards, Gamelan orchestras, toasting DJs…the list could go on forever, really. For every ten guitarists making like Steve Vai, there’s a heavy metal drummer recording his solos, and for every ten of THOSE there’s some avant-garde jazz dude improvising on an alto sax.

And every one of those musicians, no matter how hopeless or obscure, suddenly has access to an unprecedented amount of information about who’s listening. Just as an example, any twelve-year-old who farts into his four track and posts the result to Mp3.com can check in each day to see exactly how many people went to his page the day before, how many people previewed his tune, and how many people downloaded it.

Again, developments like that one will mutate art and commerce simultaneously. On the one hand, the business implications of such incredibly precise statistics are hard to grasp. It’s good for performers, because the more accurate and easily accessible that information becomes, the harder it is for anyone distributing music to get creative with the ledgers. But don’t shed any tears for the suits — that kind of information is gold, and once you tack on individual e-mail addresses for anyone who downloaded some band’s song, folks with MBA’s are going start paying people much less than it’s really worth to get it.

On the other hand, instantaneous feedback affects artists in ways that are difficult to measure but no less real. If you’re a nobody, of course, the simple knowledge that somebody is listening motivates you to keep going. But what if you’re semi-established? What if you’ve always claimed that you don’t give a damn what people expect, you’re all about making the music you hear in your head? What do you do when the universe hands you the opportunity to finally do so on a silver platter? Do you rise to the challenge? And if you do, what happens the next day, when your numbers plummet?

Let’s talk about the Smashing Pumpkins some more. They’re kind of big. In 1998 they made a record called Adore that was experimental in the sense that it lacked many of the musical elements which had originally helped the band get so big. And, in relative terms, it tanked. It didn’t sell as well as the albums which made the band big in the first place, and it didn’t get the kind of reviews that suggest all the people who didn’t buy it now would be changing their minds at some point in the future. Two years later, the Smashing Pumpkins are back with their old drummer and their old gigantic guitars.

That’s a very good example of one way feedback affects bands.

I am, of course, painting with the broadest possible strokes. In fact, I haven’t listened to any Smashing Pumpkins albums all the way through. Devoted fans would probably tell me I’ve missed the point of both Adore and whatever the hell the new album’s called. But that’s just it. Devoted fans probably bought both albums. And the Smashing Pumpkins happen to be interested in reaching more than the devoted fans. They’re not playing to the front rows. They want to reach the kids milling around in the back.

Digitally distributed music will not ignore the kids milling around in back. But it does promise bands who don’t care about those kids a potential arena-full of front-row listeners, listeners who have always taken great glee in following the twists and turns of various musicians’ vision, and who will be equally thrilled when they discover how much more quickly and intimately the internet allows them to interact with their favorite acts. And like a bunch of physicists observing sub-atomic particles, those listeners will unwittingly influence the decisions artists make about what gets recorded, and how.

The same thing happens now, of course, just not as fast — but it’s that very speed that’s going to change how we experience music. We’re accustomed to waiting at least eighteen months or so before hearing a new batch of tunes from an act, and we think it’s natural to track an artist’s progress by comparing and contrasting the set from 1998 with the set from 2000. But that’s a business cycle, not a creative one — songs come when they come. A lot of musicians can’t make a good record every two years; others can’t wait that long.

So here’s the weird part. All that speed will actually liberate musicians by allowing them to work at their own pace. What digitally distributed music really offers artists is options: if you’ve got one or several songs you want to get out there, you’ll be able to release them without waiting three months for the label to turn around the packaging. If you don’t think your new material is up to snuff, you won’t be beholden to a major label’s marketing schedule (and you can probably afford to wait, if you’re nurturing a large enough fan base via your own web site). There won’t be just one business model, there will be several, or dozens, or hundreds, all adapting constantly to milk whatever cash they can out of a boggling variety of cows.

Art and commerce will always collide, and I don’t pretend for a moment that this will stop in the future, or even that it should. 100,000,000 “artists” collectively gazing into their navels on the internet is not automatically a good thing. But I do find the prospect more exciting than frightening, if only because such a phenomenon can’t help but emphasize the Music half of The Music Business. It’s not hard to imagine two tiers developing: musicians who want to be famous, and call on the major labels’ marketing muscle to help them cut through the clutter, and musicians who just want to create. When you get bored of one, the other will always be there. And each will influence what the other gets up to, of course.

To the casual listener, it won’t seem all that different from what we have now, which is why it’s kind of boring. But I suspect there will be a lot fewer casual listeners in the future.

That’s the beautiful part.