The Internet is changing the music industry

This article focuses on the emerging distribution paradigm in the music industry which is tightening competition within the industry and allowing more efficient ways for consumers to get their music. In the past, bandwidth restrictions have impeded distribution of music in digital form over the Internet. However, these restrictions are disappearing due to advances in networking technologies. Consumers are now able to procure and play high-quality music in digital form directly through the Internet. According to the Recording Industry Association of America, Internet-based sales of CDs and digital downloads in the U.S. have reached $500 million in 2000. Brick-and-mortar retailers are recognizing the value of Internet sales. For a long time, record labels have given brick-and-mortar retailers full responsibility of distributing music to consumers. But with rising prominence of online retailers, record labels must work with these emerging retailers or become online retailers themselves. Some key players in the music industry have readily embraced the Internet, hoping to reap first-mover benefits. Others have been cautious about jumping on the Internet bandwagon.