The Dream Is Over: Music Labels Have Killed Their Digital Future

The hope of pioneering the music industry's most profound transformation, that inspired entrepreneurs over 10 years ago, has finally been snuffed out by the very people who would have profited the most—the music industry.

The table is now set. There will be no new players of significance to enter the business. Investors don't want to entertain the remotest possibility of funding any start-up that deals with music, no matter how clever and innovative. As one major media venture firm told me a few months ago, they're tired of writing cheques for big advances to record labels. Not to mention the huge legal fees that start-ups have to spend in order to get licensed, a process that takes at least a year. What's most ironic is that the record labels have now put themselves in the position of having to depend on the bulk of their digital sales from companies that actually couldn't care less about selling music: Apple, Amazon, and now Google. These behemoths have huge revenues, 99.9% of which are not related to digital music sales.