Let music lead the way

Playlist services could be an enormous boon to the labels. The vast quantity of music online creates a need for aggregators that can introduce new songs and artists, assemble individual tracks into hours of programming, and organize the chaotic mass of music into something coherent. That's the niche that companies such as Project Playlist fill. The problem for labels and artists, though, is that their business has long relied on selling music rather than generating money from what people do while they're listening to it. And services like Project Playlist are designed to sell advertisements, not songs -- which would be a fool's errand, given how easy it is for consumers to find free music online.

Record companies are trying harder than before to profit from music that's free; witness efforts such as iMeem, MySpace Music and Nokia's Comes With Music. But they're not making nearly enough money from such ventures to compensate for the steep slide in CD sales. More to the point, they haven't yet made it easy for innovators such as Project Playlist to build new businesses that automatically generate income for copyright holders. That's what the major television networks have achieved in the past year by making their programs available online with built-in advertising. Entrepreneurs who want to construct businesses based on TV shows from CBS, NBC and Fox can do so easily online, and the viewers they attract generate more dollars for the networks. The record companies too need to join entrepreneurs in the marketplace, not the courtroom.