There's Just No Making The Music Industry Happy

First they fight online music swapping tooth and nail, saying they're being cheated out of sales. Fair enough. Then they control online music sales where people pay 99c for zeros and ones - with no labor or material overhead such as CDs, cassettes, etc. out of their pockets. Now they're bitching about THAT.

Customers at three of the leading online services - iTunes, Musicmatch Inc.'s Musicmatch Downloads and RealNetworks Inc.'s Rhapsody - buy about 10 times as many singles as they do albums. Offline, people buy 50 times more CDs than singles.

The shift to online shopping could be lucrative for the music industry if the flexibility and convenience lead people to spend more on tunes than they do today. But some industry executives and analysts fear the opposite result, with music lovers buying a few 99-cent singles instead of $15 CDs.

And, some industry veterans worry, moving to a singles-oriented business could lead to fundamental problems for artists and labels.

"There's no money to be made from singles," said entertainment attorney Gary Stiffelman, whose clients include hit rapper Eminem. "Unless you can sell an album you can't really afford to launch the artists. The whole economics are driven by some sort of critical mass of product."

Add this to the fact that Universal, EMI and others are suing the investors of Napster version 1, and it makes this even more nertz.