Further to my last post.

Why would a business treat its customers like criminals? Label executives are not crazy. The problem is they are MBAs acting rationally.

It is totally rational and logical that major labels are behaving as they are. In the 1980s major labels abdicated their roll in artist development. Instead they focused purely on marketing and distribution of their properties (music libraries), which yielded a higher return on assets. Smart business decision so long as you have a lock on distribution. But now that lock on distribution is gone, and they are losing grip on their business. They are the classic Innovator's Dilemma. As their business slips away they need to protect it.

What is their business? Hint: It aint the music industry. It's DISTRIBUTION. DRM is meant to protect one thing and one thing only - distribution. The labels must control distribution if they are going to protect their business model.

I am not a music industry professional. I am a fan. But for just over three years I have been studying and following the developments within the music industry, and without a doubt I believe that Clayton Christensen has a perfect case study in the works. The result is massive opportunities developing for entrepreneurs who can understand a market where:
1. Distribution is Free
2. DRM does not work (and is Bad anyway)
3. More artists will be creating more music
4. Artists need to make a living producing music
5. Fans need to be treated like valued customers