But the interesting ray of light was buried in the story.

“We’re not going to have $14 billion in iTunes and Amazon sales no matter what we do,” says NPD Group VP/senior industry analyst of entertainment Russ Crupnick. “There’s still tens of millions of people who haven’t tried the digital music model. Half of them have digital music players. Some of them use. We’re not making the case for them to buy as many CDs as they used to and not making the case for them to buy anything from digital. Variable pricing is irrelevant.”

This is where other new digital business models could come into play, such as Nokia’s Comes With Music model and the kind of collective licensing being pioneered by Choruss, both of which would bundle the cost of music into other services or products. Both rely less on a revenue-per-unit model and more on revenue-per-user. Or “pricing the consumer versus pricing the content,” as one label digital executive puts it. “We think the real story around price as it relates to the audience for digital music is with respect to the new business models that are user-based as opposed to wholesale price-based.”

I sure would like to know who the unidentified label exec is who spoke out of school, because it finally points to a hint of intelligence. Could it be that labels are finally catching on to the concept of monetizing traffic? Are they finally moving away from the unit sales mind set of the past?  Rumor is that the labels are restructuring their deal with imeem to reflect a per user rate instead of a per stream royalty rate. I hope for imeem’s sake that its true. But what’s to keep major label greed from being unrealistic in their pricing in a “per user” model? Nothing. If labels are finally moving in this direction, they deserve credit. Better late than never. After all they’ve already led to the loss of tens of millions of dollars that investors sank into a multitude of music services that failed due to the labels’ outrageous demands and shifting strategies, making it nearly impossible for a start up to get legitimate funding. And based on history they have always manage to get greedy and fuck things up. Nobody ever loses a job for saying “no”. If label execs don’t start saying “yes” they’re going to lose their jobs anyway because there won’t be any music companies around to work for.

© 2009, Wayne Rosso. All rights reserved.