With CD sales in a downward spiral, and music downloads not even close to making up the difference, there is constant speculation on the next business model for the music industry. One of these oft touted models is ad-supported music. The music will be free; you will just have to get through the ads.

It is surprising more people haven’t realized, but this model has been with us for quite awhile. Mark Ramsey puts it clearly in this article discussing Chris Anderson’s upcoming book Free. Ramsey states:

“Anderson also thinks most music will eventually be free (and I agree with him). And you know what they call an endless stream of free, ad-supported music, right? Radio.”

Clearly, ad-supported music is not a new model! However, what many hope will be new, is payment to the music industry. This is why the RIAA and foreign-owned labels are going after performance licensing fees for radio play.

In the past, radio play sold CDs, and everything was ok. Now, with sales drying up, there doesn’t appear to be any reason to give this music away. Obviously, radio station owners do not think additional licensing fees are a good idea. They are fighting this proposal.

So what do we have? Slowly dying radio stations, desperately trying to keep ad income to themselves. Record companies looking to get a piece of this same ad income to bolster their own disappearing revenue.

What we are witnessing is the evolution of both radio and the music industry. Something WILL arise that will allow ad revenue to be distributed to content creators. Then, there will be no reason for the music industry to support radio. Traditional radio will have to evolve or die. On the other hand, right now the music industry doesn’t have anything else. Forcing radio to “pay up” is at best a short term solution, at worst it will hasten declining CD sales.

Both sides might find a satisfying solution by working together. It does seem clear, though, that fighting for a larger piece of a shrinking pie will not help anyone in the long run.

Joseph Fosco