CDs are dead, and major labels are not far behind.

Jeff Jarvis gets it. He sees the future for what it is. Do you?

Are you in denial about the coming decade?

Jarvis points out that "aggregation is the new scale" or, as I'd put it, "the reason digital distribution is changing everything."

Scale--the theory that size matters--is the building block of aggregation, for small scale begats limited aggregation. But today consumer scale (from a digital perspective) has achieved critical mass. The emergence of profitable niche has stretched the long tail and taken the fat end of the market with it. It's obvious that as soon as some copyright issues are resolved, the music industry is going to explode.

As Jarvis alludes, mass customization is upon us, from Nikes to Barbies. It's even upon us in the music business, except that it's still underground and basically uncaptured. The massive success of iTunes hints that customization will fuel opportunity sooner rather than later.

How To Win Friends and Influence People in the Music Business

David Lowery sets the record straight.

Wired says discs are dead

Another epitaph for the spinning coaster.

By hardwiring manufacturing costs into the system, discs obstruct market evolutions like flexible pricing or small-profit releases that appeal to niche audiences.

Hardwiring also constricts format, which, given the overwhelming demand and current conversion to digital, is a non-starter. The latest generation of music buyers--the tweens--already see digital distribution as the norm, not the future.

The countdown for the extinction of CDs is about to begin

Cuban says it's about to begin, but I think it began two years ago.

So many good things.

...Loss leaders like Walmart and Best Buy can cut their music square footage by 90 pct and sell more music at lower prices. Their inventory carrying costs will go to zero. If someone wants the CD, they can go home and burn it after docking their MP3 player to their PC. Believe or not, the labels will make more money this way because they will make these big boys committ to minimum guarantees at levels they are at now, and all that money after the artist cut, will go to the bottomline.

Everything about the economics makes absolutely perfect sense for the music labels, the retailer  and the customer.

The only question is who will be the first label to crack and offer this and how soon will it be. Of course the cynics will say that this won’t ever happen, but I’m not buying it. It’s too much cash up front for the labels to say no to. It also makes too much business sense.

When it happens, the music industry will EXPLODE and sales and profits will go through the roof.

Why? Because stores can be smaller, physical inventories minimal to non-existent, and an entire segment of middle infrastructure on both the label and retailer side for ordering, delivering, warehousing, duplicating, returning, and forecasting of product can be eliminated.

Most importantly, that money can be spent to develop, market and promote music so that more and more people can experience it, and also, just in case hell freezes over, be used to lower the price of music to consumers

Once that first label, or the first organized group of indies goes purely digital at retail, then the countdown for the extinction of the CD begins. T-minus 5 years from that first day, and your CDs will be sitting right next to the LPs your dad and mom collected when they were kids.

Until then, if Im a band selling on my own, I’m carrying a laptop to every show, and charging 5 bucks to drop a show on an IPod. Call it concertpodding.

If I’m an indie record store, I’m making sure that all music from the labels you support is available for direct to player. I’m offering every song as Ipod or MP3 player ready to anyone who walks in the door with their Ipod and wants to leave listening to the music.

It’s money in the bank.