We're starting with online music. No industry, except arguably the newspaper one, has been rocked (pardon the pun) more by the Internet than the music industry.

The online music decade started with Napster, a music file sharing service created by Shawn Fanning that operated between June 1999 and July 2001. Napster enabled people to freely share MP3 files over the Internet; however it quickly ran into major legal trouble. Napster was the subject of lawsuits in 2000 by touchy metal band Metallica and others. It was eventually shut down by court order, after several major record labels went after the service.

After Napster's demise, a P2P application called Kazaa became the most popular service for music file sharing. But it too eventually succumbed to record industry attacks.

Curiously, both Napster and Kazaa were recently reincarnated as law-abiding services. After years of re-launch attempts, Napster was acquired by Best Buy in September 2008 and was born again in May 2009. Meanwhile Kazaa turned into a legit music subscription service in July this year.

iTunes / iPod: Digital Music Goes Commercial

While Napster and Kazaa tried to skirt around the commercial imperatives of music, like paying artists, Apple took on the record industry in an entirely legal way. In January 2001, Apple launched a digital music player for music called iTunes. Then in April 2003, the iTunes Store was launched. It offered the ability to buy songs for 99 cents each, which had a major impact on the music industry.

Soon after Napster's demise in 2001, Apple launched what was to become a revolutionary device in the music industry. The iPod was launched in October 2001 and it became the most popular portable music player since the Sony Walkman in the 1980s.

Fast forward to 2009 and iTunes continues to evolve. In January Apple announced that iTunes would go DRM-free. In September 2009 Apple launched version 9 of iTunes, which included a Genius-like recommendation feature for apps and 'iTunes LPs' - a feature that brings liner notes and artwork to digital albums.

MySpace: Music & Social Networking

MySpace was launched in August 2003 and soon became a popular hangout for local bands, especially indie rockers. MySpace provided a way for those bands to promote their music and reach a wide network through social networking.

As ReadWriteWeb's Sarah Perez wrote last month, it was a virtuous circle for MySpace. The bands' presence on MySpace "began to attract a young, hip crowd of users who were interested in following pop culture, and, in particular, the up-and-coming artists they discovered while browsing through the network. Only eight months after its launch, MySpace began to experience exponential growth, as its users created profiles and friended others who would then, in turn, invite more users to join the social network. Thanks to the "network effect," MySpace soon became the place to be online. Everyone was there."

However by 2008, MySpace had ceded the social networking crown to Facebook. In 2009, MySpace is once again trying to reclaim its heritage as a music service. In October MySpace launched "Artist Dashboards" and integrated its music video vault with recent acquisition iLike.

Pandora & last.fm: Online Music Discovery

Online music services have flourished in the 'web 2.0' era, when the ability to find new music and share it with others via the Web became increasingly sophisticated.

Two services in particular stand out. One is Pandora, a free online music discovery service. Pandora was founded in 2000 and continues to grow, despite various legal issues over the years. As ReadWriteWeb's Frederic Lardinois noted earlier this year, Pandora derives its revenue from targeted audio advertising in its music streams and affiliate sales through Amazon's MP3 store and iTunes.

Last.fm is another online music discovery service. It was founded in 2002 and was sold to CBS in 2007. It continues to innovate in 2009, for example in May this year last.fm announced combo stations, allowing a user to create a station with up to three artists or tags.

Conclusion

This post and series was inspired by one of my favorite blogs and podcasts, NPR's All Songs Considered. They're currently looking back at the decade in music and much of the discussion is about how the Internet helped define it.

And it's true, when you think of music at the end of 2009 you think of iTunes, Pandora and last.fm - MySpace even. The record industry is still coming to terms with these and other changes.

Tell us your online music memories of the past 10 years. What's been your favorite online music product or service during that time?

Does this mean Shazam is about to give Pandora and the like a run for their money?

The free Shazam application is best known for its nifty tune identification trick. Mobile users can hold their iPhones up next to a speaker or other source of music and the application "listens" to what's being played in order to identify the song and artist. It also lets you read track and album reviews, read artist biographies and tag songs to share with friends over Facebook and Twitter.

The new application, Shazam Encore, adds even more functionality including improved speed performance, trend lists that highlight what's popular among other Shazam users, a search function that taps into a database of 8 million+ songs, music recommendations and a "drive-and-tag" feature that lets the app recognize when it's in an in-car dock so it can identify what's playing on the radio while you're driving.

But How are Those Recommendations?

Out of all the new features, however, it's the music recommendations option which is the most interesting. Recommendations are the killer feature which can either make or break a mobile application these days. With services like Last.fm and Pandora already providing mobile users with playlists based on a user's likes or dislikes, Shazam needs to be able to do recommendations well - really well - in order to compete with these already popular applications.

In addition, the up-and-comer streaming music service from Spotify also partnered with The Echo Nest's music intelligence platform earlier this year to help improve on Spotify's playlist and music discovery functions. The end results of that partnership have been touted as being like the iTunes' "Genius" feature, only better. Although not yet available in the U.S., Spotify's mobile application is one of the most highly anticipated applications as it provides a new way to enjoy music - through playlist creations that can be listened to both online and off. It, too, will be heavy competition for any application entering into the music recommendations game, including, of course, Shazam.

So where does that leave Shazam Encore? At the moment, its recommendations offering provides you with a list of other songs you might like based on the one track you have pulled up. While this might help you discover new music, you aren't able to create a playlist based on those songs. Instead, Shazam's focus remains more on the sharing of music via tagging and posting to Twitter and Facebook.

As far as how good Shazam's recommendations are, we would need to do a lot more testing before giving a solid opinion - the app is just too new. In fact, it's so new that it wasn't even showing up in an iTunes Store search at the time of writing. The provided screenshot in the App Store doesn't look all that encouraging, though. (Really, a fan of indie band My Sad Captains wants to listen to Katy Perry singing about "kissing a girl?" I don't think so...)

But whether or not the recommendations are up to speed, it remains to be seen whether iPhone app shoppers will be willing to fork over the $4.99 US (£2.99/ €3.99) to have access to them, especially when there's no playlist option included.

Those interested in trying the new Encore application can find it now in the App Store by clicking here.

One of Orb's best features is the OrbLive iPhone application which connects with your home computer over the internet to provide access to your media library of audio, video, and photos. Through the mobile application, you can access any of your media files and play stream them over either a Wi-Fi or 3G connection. In the Windows version of the software, PC's with TV tuner cards can also connect you to live, streaming TV in addition to the other shared media saved on the PC's hard drive.

To some extent, Orb competes with Apple's own offerings since it provides access to music and video from either a desktop computer or an iPhone. That's why it was somewhat surprising that Apple ever approved the company's iPhone application to begin with. Even more surprising is that they allowed it to function over 3G when similar products - like Slingbox's SlingPlayer for iPhone, another live TV streaming app - are restricted to Wi-Fi only.

No Live TV for Mac Users Yet

Unfortunately, the Mac version is debuting without the live TV streaming functionality. According to Joe Costello, CEO of Orb Networks, support for live TV support will be added in subsequent versions. In the meantime, however, Mac users can install the Orb software to stream music, photos, videos, home movies and webcam feeds stored in iTunes to their iPhones or to any other internet-connected device including netbooks, notebooks, media players, game consoles and more. All that's needed is the new Mac OS X desktop software (works on OS X Intel 10.5 or later).

Those interested in trying out the new Mac version can grab the installer from here: orb.com/en/download_orb. For now, the Mac software is available in English only.

Magnatune has always done things differently. It was one of the first online music services to allow its customers to choose how much they wanted to pay for an album. From its inception, the service never featured DRM'ed music and always offered its albums in alternative formats like WAV, OGG, FLAC and AAC. On its website, Magnatune offers a commercial-free streaming plan starting at $5/month (users can choose to pay more) and a download membership that starts at $10 a month.

Sadly, the first version of the iPhone app doesn't support these membership options, but according to Magnatune's announcement, the next version will allow paying members to stream announcement-free music.

Features

The app itself is pretty straightforward. You can browse Magnatune's catalog by artist, album and genre. One neat feature of the app is that it remembers where you left off when you turn the app off - or when you get a call - and prompts you to return to that song when you start the app again.

Shopping

The Magnatune store allows users to buy songs right from their phones. Most of Magnatune's artists are featured in the iTunes store, and the app simply takes users to the iTunes app to buy the song. This, though, also means that potential buyers can't choose how much they want to pay for an album.

Record Labels on the iPhone

Another label that has also released an iPhone app recently is Ghostly International. This app (iTunes link) features only a selection of Ghostly's catalog, however.

We have talked a lot about how bands and artists have started to look at iPhone apps as replacements of traditional albums. Hopefully, more music labels will now also follow Magnatune's lead and release their own apps. With built-in purchasing and music discovery, this is a logical extension of the app-as-album trend - but then, the major music labels aren't exactly known for being logical.

Yahoo Video Search lets users filter searches by the length of the videos. Search queries can also be restricted to official videos from a band or artist. Just like it does with non-music related searches, Yahoo also features recently shared videos from Twitter at the top of the search results.

Yahoo Video displays videos from services like YouTube, DailyMotion or MetaCafe right on the search results page. For the vast majority of video services like Artist Direct, however, users have to leave the site to see these videos. In our tests, this new feature mostly worked as advertised, though it sometimes showed songs that weren't part of the album we had selected.

Reaction to Google Music Search?

It is worth noting that while Google launched its new Google Music Search service last month, Yahoo also offers a seamless integration with Rhapsody on its site.

Weezer released its latest album today, with a Snuggie. See the video below.

Fans interested in the music alone can purchase the album sans blanket-with-arms for a mere $9 on Amazon. (Update: $4 today - sale!)

It's pretty funny, really. People do seem more willing to buy these ridiculous blankets with arms than they are to pay for music these days. I think that's the point.

Thanks to Yahoo's Christian Heilmann for bringing this to our attention.

What Will This New Feature Look Like?

In this new implementation, users can't choose between the Lala or iLike widget. Instead, Google will randomly decide which widget a user sees. This gives Google the option to switch between services and to include other services in future as well.

Buy Songs from Rhapsody - See Lyrics from Gracenote

Underneath the music onebox results, Google will feature links to its other partners, like Rhapsody and iMeem, where users will be able to purchase MP3s.

Google's partnership with Gracenote also allows it to show lyrics in the search results now. As Marissa Mayer pointed out in today's announcement, finding lyrics is still very hard on Google. Now, users can type lyrics into the default search box and Google will return results from the music search feature, and users can play the song right on the search results page.

Big Winners: Lala and MySpace

The big winners here are obviously Lala and MySpace/iLike. For Lala, this has been an especially busy period. Just last week, Lala announced a partnership with Facebook. It now powers Facebook's music gifting service.

iLike has a traditional streaming model. The company streams some song full length and some as 30-second samples. Users can buy MP3s from iLike for between $0.99 and $1.29. MySpace bought iLike earlier this year, and the widget on the Google search results page will be MySpace-branded.

Lala's business model is more interesting. Users can stream every song on the service once for free. After that, customers can buy the right to stream it for $0.10 or buy the MP3 for $0.89. Users can also upload their own music library to Lala and then stream those songs freely over the Internet.

How important this move is for the two streaming music services becomes clear when we look at the current traffic data for music-related searches on Google.

Update: We just had a quick chat with Lala's CEO Geoff Ralston after the event. The Lala team is obviously very excited about the partnership with Google and as Ralston told us, the company worked with Google for quite a while to get this new feature up and running. According to Ralston, Lala's partners in the music industry were very supportive of the integration. We also asked him if he was worried that the new influx of traffic was going to bring Lala's servers down. Google, however, stress tested Lala's servers and couldn't bring the service down with up to 550 queries per second.

What Does Google's Current Music Traffic Look Like?

Hitwise's Heather Dougherty took a close look at Google's music traffic earlier today. According to Hitwise's data, about 6% of last month's top 1000 search terms on Google were music-related. In total, Google sent about 1.48% of its traffic to music sites. The majority of these searches (15.32%) lead to a Wikipedia site, but almost 10% currently go to YouTube, 5.7% to Yahoo Music and 3% to MySpace.  Now that users can listen to music right from the search results page, these services - including Google's own YouTube - will likely see a drop in music-related traffic over the next few weeks.

That "different space," as it turns out, is music...and it really isn't all that different, especially considering MySpace's roots. If anything, this major overhaul of the social network is an attempt to return the site to becoming the popular entertainment hub it once was.

When MySpace hit the scene back in 2003, local bands - especially indie rock bands - were among the first to create profiles on the social network. Their presence immediately began to attract a young, hip crowd of users who were interested in following pop culture, and, in particular, the up-and-coming artists they discovered while browsing through the network. Only eight months after its launch, MySpace began to experience exponential growth, as its users created profiles and friended others who would then, in turn, invite more users to join the social network. Thanks to the "network effect," MySpace soon became the place to be online. Everyone was there.

But at the same time that MySpace was having its heyday, another social networking site was being created. Although still in its infancy in 2004, a Harvard student named Mark Zuckerberg began writing the code for what would eventually become Facebook, now the world's largest social network.

Over recent months, we've seen the mass exodus from MySpace to the more popular - and more populated - Facebook. Studies have shown that those left actively engaging on MySpace now tend to be younger, lower-income users. Researcher Danah Boyd pointed out, somewhat controversially, that the differences between the two networks, MySpace and Facebook, went further than age and income - they involved your "social class," too.

Tired of being compared to Facebook in this way and certainly tired of hemorrhaging its users, MySpace CEO Van Natta has plans to turn the sinking ship around. After taking over the company six months ago, he's been busy arranging new partnerships for the one-time king of social networks. These partnerships aim to bring the focus back to music, and less on socializing.

New Music Initiatives: iLike, Videos, Artist Dashboards

One of the most notable new initiatives involves MySpace's iLike integration. After being acquired by MySpace in August, many wondered why iLike wasn't becoming a part of the MySpace network. Actually it was, but Van Natta didn't want to disclose that information at the time.

But now, the iLike acquisition is beginning to make sense. Through iLike music video widgets, now popular installations on other social networks like Facebook and Orkut, the videos - and, most importantly, their ads - can be streamed on other sites while the revenue generated returns to MySpace. Even though many of the users watching these videos now may be lost forever to MySpace, they're helping the company regain its footing through their streams.

MySpace's entire music video vault, one of the most popular features on the social network, has also been integrated with iLike. In August, comScore reported 45 million people watched 340 million videos during the course of the month. It only makes sense for MySpace to capitalize on that activity, which is why the company has now launched MySpace Music Videos, an online video archive where users can not only watch videos from their favorite artists, but with a click, purchase the song or ringtone from Amazon or iTunes. Meanwhile, pre-roll, post-roll, and overlay ads help to monetize the content.

In addition, to cater to the musicians, bands, and labels who make MySpace their home, the network has also launched "Artist Dashboards." These online analytical tools track the fans' demographics by age and location, the total number of plays per song, profile views and more. Every artist with a MySpace profile is given free access to these tools.

Is it Enough?

The question that remains, of course, is whether or not MySpace's re-branding efforts will be enough to keep the site from going under. Although MySpace still had a healthy 64 million users in August of this year, that number is 12 million fewer than it did at the same time last year. Meanwhile, Facebook climbed to 300 million worldwide that same month.

Can MySpace entice people to come back to the network through its new music-based initiatives? It's too soon to tell at the moment whether the strategy will work or not, but it's definitely the network's best shot. By capitalizing on what remains the most popular activity on MySpace to date (music and video), the company hopes to become more of a niche site for socializing around music instead of a site for just socializing. The newly launched features are just a part of the company's overall efforts in this direction, too. Still to come are concert ticket and merchandise sales, although no details or launch dates have been given for those features as of yet.

While these efforts may not ever allow MySpace to reclaim its status as the number one social network - that ship seems to have sailed - they could definitely help the network maintain profitability. And at the end of the day, that's all that's really needed. It's not about how many users you have, it's about how much money you can make off of those that you do.

According to Ek, the notion of overnight success is "very misleading and actually rather harmful to any hope for long term and sustainable growth in this industry." Despite this fact, he calls out the music industry for doing just that and expecting to see business models proven "within months of inception."  That's just not how it works, he says, reminding us how iTunes was not initially the powerhouse it is today. In its first year, the company missed its revenue targets by 30% and most label executives doubted its staying power at the time.

While Ek realizes that comparing iTunes to Spotify is wrong given the very different business models for each company, it does prove the overall point: success in this industry takes time.

Spotify, which is currently hugely popular in Europe, has yet to launch in the U.S. due to contract negotiations over licensing agreements. However, as popular as the service is, it still has a long way to go in terms of both product and monetization. Ek acknowledges that one thing which needs to be addressed is how difficult it is for Spotify users to actually buy the music they're listening to. Yet despite the fact that nearly 80% of the company's users are unaware that they can purchase the tunes they're hearing, Spotify is still one of the biggest affiliates to music downloads.

Another challenge facing the company is how to earn a profit considering the large costs of licensing the music it plays... especially when reliant on an ad-supported model. (Spotify offers multiple service levels, one being ad-supported. It also offers subscriptions.) Earlier this year, another streaming service, Last.fm, had to do away with its ad-supported model for the same reason.

The Music Industry Needs to Change

If it was up to Spotify, the music industry would be embracing the future instead of constantly fighting against it. Ek says that in order for the industry to find success, it needs to realize that the new business model is "a mix between ad-supported music, downloads, subscriptions, merchandising and ticketing where the user comes first and where the key to monetization comes from portability and packaging access rights." If willing to adapt, the music industry could then have the potential to become a $40-50 billion industry and one that could grow stronger than it ever was.

Until that time, it looks like Spotify has a long road ahead of it, but it's good to know that it is up for the challenge. "We aren't interested in just trying to hype the company and then flipping it," Ek says. "We are in this for the long haul."

Warner Will Sell its Own Ads and Get a Custom Player

Judging from the announcement, it is clear that the Google Content ID system (which was just integrated with YouTube's stats package earlier this week) was a major factor in bringing Warner back to YouTube. It's also important to note that Warner will sell its own advertising inventory. Thanks to this, as Billboard's Antony Bruno points out, Warner will be able to set its own prices and keep the majority of the ad revenue, even though it will share revenue with YouTube. Bruno also notes that YouTube will create a branded player and custom artist-channels for Warner's content and that Warner hopes to include more commerce and social networking features in this player.

According to recent reports, however, Spotify may do things a little differently when it reaches the States. Says Andres Sehr, Spotify's global community manager, the company is considering going the "freemium" route for the U.S. market.

"Freemium" is a word coined to describe a business model where basic services are free while special or advanced features are available for a fee. That's a slightly different spin on the business model Spotify uses today. Currently, Spotify offers its European users a choice between a free, ad-supported application and a paid app which costs around about €10 (around $16.60) a month. With a Spotify "freemium" service, however, there would be just the one application in which users would pay for the extra features they want to use. Details on how exactly this would work and what features would come at additional cost is still unknown. Sehr says it's far too early say at this point. Also unknown is whether this "freemium" model would forgo the monthly subscription fees in favor of the premium upgrades.

In an interview published today in the Wall Street Journal, Sehr explained why the company is considering making this sort of change. "The U.S. is a completely different market, and the competition landscape's different," he said, adding that "when we launch there, it'll definitely be a challenge for us."

What Sehr is referring to is the particularly crowded market here in the U.S. where services like Imeem, Pandora, Last.fm, and many others are already well-known and popular destinations for streaming music online. In other words, Spotify isn't just rivaling iTunes in the U.S., it's going up against a number of other companies doing nearly the same thing, too.

Spotify on the Mobile

Where Spotify has an edge over its competition is on the mobile front. Although there are plenty of streaming music applications available for both the iPhone and Android platforms, Spotify's app does things a little differently...and considering the glowing reviews, better. Instead of simply providing a streaming radio of sorts based on a user's musical preferences, Spotify's mobile users can actually pick and choose the songs they want to listen to and build a custom playlist. That playlist can also be streamed when the mobile device is offline thanks to Spotify's caching technology.

For this reason, there were originally concerns that Apple would reject the streaming music app because selecting tracks, making playlists, and playing music offline puts it in direct competition with iTunes itself. Those concerns were soon discovered to be unfounded as Apple recently approved the app for distribution via App Store - a decision no doubt influenced at least in part by FCC scrutiny over the company's app approval process and anti-competitive tactics.

While the initial launch of the Spotify mobile iPhone/iPod Touch app is only in the European counties where Spotify is currently licensed, the Apple "seal of approval" means that (in theory), Spotify won't have any trouble making it into the American App Store, too. That is, once they get the American licensing agreements worked out.

Although the company already has European deals with Universal, Sony, Warner, and EMI and it solidified an American licensing agreement with the Independent Online Distribution Alliance (IODA) in July, its the Stateside licensing agreements that are holding up the service's U.S. launch. Still, the company remains optimistic and expects to make its American debut later this year or in early 2010.

Features

Rhapsody has all the features you would probably want from a streaming music app. Browsing by genres, charts, or simply searching for artists and specific tracks is easy and fast. Once you have found something you like, you can also easily add it to your 'library' so that you can find it quickly at a later point. Rhapsody also offers radio stations based on genres or artists, similar to what the Slacker Radio and Pandora apps offer on the iPhone.

One thing we especially like about the app is how easy it is to manage and create playlists. While this feature is somewhat hidden - you have to keep pressing the name of a song or album for a second or two for the right menu to pop up - it does give you the ability to create a library of songs you like and to manage playlists.

We are not quite sure at what rate Rhapsody is actually streaming this music to the iPhone, but at least over Wi-Fi and the AT&T 3G network, the sound quality is quite good.

Rhapsody vs. Spotify

In the US, Rhapsody is currently the only game in town when it comes to on-demand music streaming. Unlike Spotify, Rhapsody doesn't offer an offline mode, thanks to the arcane licensing restrictions the music industry still favors, and is only available in a select number of markets in Europe at this point. Maybe later versions will feature this ability - especially given that Apple has now allowed the Spotify app into the App Store.

Once Spotify launches in the US App Store, however, Rhapsody will come under a lot of pressure, especially if Rhapsody doesn't offer offline storage at that point. Currently, Rhapsody does offer more songs (8 million vs. 4.5 million) and the prices are similar (€9.99 vs. $15).

Free Trial

Signing up for the free 7-day trial is easy and doesn't require a credit card, so if you are on the fence about trying Rhapsody out, just install the app and follow the instructions from the home screen. Apple just pointed out that it doesn't believe in music subscriptions during its annual iPod event yesterday, but depending on your listening habits, a $14.99 subscription per month might actually turn out to be a pretty good deal.

Not so many years ago, consumers had little choice when it came to buying new music. If you fell in love with a favorite song from an artist or band, you bought the CD. Singles had already been phased out for the most part, so the choice was either to buy the CD or nothing at all. For this reason, artists were able to make oodles of cash even when they were only a one or two-hit wonder. Yet somehow, the music industry is convinced that people actually bought CDs for all the nifty content contained in the included booklets. With the iTunes LP, they're reinventing that booklet for the digital age and packing it full of media like lyrics, liner notes, album art, photos, and even videos - that last one being something that you certainly couldn't cram into the CD case in days past. With this digitally enhanced LP, labels hope consumers will once again buy complete albums, not just individual songs.

Unfortunately, this "interactive" album of the future, meant to rev up album sales, is a sad, uninspired effort which tries to cram the old business model of the past down the throat of today's new digital platform. While the extras are nice to have, the iTunes LP doesn't offer anything more than what fan sites do, as we noted yesterday in our critical analysis of Apple's new offerings. And unlike fan sites, which evolve and change over time, the LP is a static offering that doesn't take advantage of the platform it lives on - an internet-connected digital music player.

Forget the Album, Buy an App

Meanwhile, as record labels scramble to save themselves with this new format (and possibly even one of their own dubbed "CMX"), some artists are starting to figure out the formula for success in this new era of single-track purchases and app-laden phones...and it's not an album. A handful of forward-thinkers have come up with a way to offer true interactive content to fans, which in turn, encourages fans to purchase more of the artist's music. The answer? The iPhone app.

Instead of trying to reinvent the wheel, these music-themed apps are innovative new ways for fans to interact with content produced by their favorite artists. For example, Nine Inch Nails released a multimedia application earlier this year where fans can access a mobile version of the fan site nin.com, interact with other fans through location-based chat and photo sharing, stream tracks and exclusive playlists, download wallpapers, and much more. Although the app is free in the iTunes app store, the side effect of having more engaged fans means having more people interested in buying the band's music. NIN, headed by front man Trent Reznor, is no stranger to this sort of out-of-the-box thinking. He has experimented with a number of ways to make rockstar-worthy income in this digital age, including last year's introduction of a creative multi-level pricing scheme for albums where consumers could download tracks that ranged anywhere from completely free all the way up to a $300 premium package. Within three days, that experiment grossed $750,000 in sales. Not a bad way to sell an album.

But Reznor isn't the only artist with an app these days. American DJ and singer-songwriter Moby has also just released an official app created by social music service iLike which offers similar functionality. Besides providing access to exclusive content, fans can interact with each other through Facebook and iLike and they can post photos directly from the app to the Moby fan community. However, unlike NIN's offering, this app isn't free. It currently sells for $1.99. Whether or not this particular money-making gambit will work, though, is still to be determined. The app is only a couple of days old at this point so it's unknown whether fans will pay.

While apps like those described above essentially provide mobilized fan communities, hip hop artist Soulja Boy went a different route earlier this summer. Using a new app platform called Romplr, his $2.99 application, "Soulja Boy Tell 'Em," lets fans remix the artist's tracks and share them with friends via email, Facebook, or via www.romplr.com. In many ways, this app represents the best use of today's digital platform by allowing for true interactivity with the music. In fact, the press release about the launch even claimed "the next wave of fan and band interaction is going to be through the iPhone." Perhaps it will be the future of music sales, too.

The trend of artists with apps shows no signs of slowing down. Just today, popular R&B artist Usher launched his own app, too, "Usher's Top 100." This app, basically a streaming radio station of Usher's favorite tunes, will appeal to fans who want to know what music has inspired the five-time Grammy award winning star. It, like Soulja Boy's app, is not free either. The price is $2.99. Again, it's too soon to tell how well it will sell.

Only the Beginning

Although this is only a handful of examples of the new ways artists are using the mobile platform to interact with fans, all of these methods are arguably more inspired than the iTunes LP digital album. Instead of thinking that the old way of doing things can simply be tweaked for the new economy, these artists are developing compelling interactions which will either be direct sources of income as paid applications or will indirectly encourage sales through a more engaged fan base. While it's too soon to tell how much extra income these apps will add to the bottom line, if we had to bet on anything that could potentially "save" the music industry, we wouldn't put our money on the LP. It looks like the future is apps, not albums.

Greenwood's biggest complaint about MP3s was not quality or sound compression, but rather abundance. He suggests that MP3s make it far too easy for fans to hoard music without "giving it their full attention". In a recent Pitchfork article Eric Harvey suggests the opposite. Says Harvey, "The mp3 may have atomized music into millions of little pieces, but each piece, it seems, found a publicist. The average music fan now has the built-in capacity to double as promoter and distributor in an ever-expanding arena that's making and eliminating rules every minute."

Whether you see them as hoarders or promoters, one thing is certain, the iPod generation is changing how music is consumed. But if they can't depend on tiered pricing for audio quality, how can companies monetize the new music fan? While a Stanford study suggests that the iPod generation prefers the flat sound of an MP3, it doesn't mean today's listeners aren't willing to pay for their music. According to an NPD Group report purchasers of digital music downloads increased by 29% last year with iTunes controlling a quarter of all music sold. Some of the ways fans still generate revenue for bands include streaming music subscriptions, track and album purchases, concerts tickets, merchandise and paid application downloads.

Update, Ed: there can be a big difference in audio quality of MP3s promoted on the Web. For example the quality varied greatly between Radiohead's In Rainbows album and Saul Williams' album (promoted by Trent Reznor). See Kim Gaskins' post on the new Latitude Research blog Life Connected for further analysis.

Photos taken from Dead Air Space