At a time were the delivery of music is changing forms from a product based container to a digital stream of information, the explosion of Internet based record labels are springing out all over the world. While the Major labels are in court trying to secure there future in the delivery of music, do-it-yourself (DIY) companies are not wasting any time adopting a new business model of digital distribution.
Digital music in MP3 format has increased in popular over the past several years, as music consumers download from Internet Web-sites or trade through online peer-to-peer sharing services, which have flourished in recent years. The Major record labels argue that MP3 downloads violate copyright laws, as the record companies are unable to collect royalties on songs copied, traded, or downloaded (O"Connor).
Despite the music industry's protests, a significant movement towards a digital music format has elevated. "Lawmakers have been increasingly vocal about their desire to see progress in the online music business, instead of a series of lawsuits and business failures" (Borland). .
Independent Internet based record labels have realize the potential that the progressing digital music trend has and is supplying their customers with artists" music in digital format via the Internet. On the horizon, of the music industry is a new generation of Internet record labels, distributing digital music from the artists directly to the consumers.
Digital music is electronic bits of information, distributed via Internet networks, telephone lines, cable systems, and satellite transmission (Digital Music). The Major Labels considers this as a threat because digital distribution is breaking down the structure of the music industry of product based distribution. In the current business model, the Major record labels are the gatekeepers whom regulate the flow of music from the artist to the consumer (Gross).