You’ve got to read this article: Broadband Penetration Increase
Bottom line, 68% of Web-users now connect via broadband.

Somehow, the record labels think it’s all about iPods.  That the revolution won’t be complete until everybody has a hand-held music device, if ever.  But the iPod is the explosion.  The revolution comes with broadband penetration.

Broadband jump-started Napster.  Acquiring files at 56k is just too damn slow except to do on a whim.  But back in 2000, only college students and early adopters had high speed connections.  Now seemingly everybody does.

And why did they get these high speed connections?

Well, interestingly, price plays a big part.  Actually, AOL just RAISED its dialup subscription price, trying to steer people to broadband.  Because its services at the newly-beefed up aol.com depend on it.  If you want to watch videos you need a high speed connection.  Which the telcos are offering at sometimes even LOWER than AOL dialup prices.  So, desirous of watching video, and enticed by the price, Joe Sixpack is springing for broadband.  And what he’s getting is faster surfing, the ability to watch video and the right to experience the online digital music revolution.

With broadband, you can download apps on the Web in a minute or two.  Apps like iTunes.  Now you can purchase tracks, but being confronted with all the free tracks on Websites and the ability to rip one’s own discs, the titles coming up in iTunes via CDDB, the new broadband customers dip their toes in the iTunes Music Store waters and then go elsewhere.

But make no mistake.  Although the initial broadband sign-ups were all about stealing music, now they’re about seeing clips on youtube and elsewhere.  It’ll be interesting to see if the movie and television entities are as stupid as the record companies and restrict the distribution of their wares.  Because, it’s been proven, people will get them elsewhere, chastising providers for being light years behind.  Also companies risk losing their place in the consumer psyche, like the record business did.

Yes, music drove the online revolution of the twenty first century.  People were signing up with their cable companies JUST to download music.  And what did the major labels DO??  They killed this activity, now ceding all the buzz to visual entertainment companies.  Can they get the buzz back?  Not by selling copy-protected tracks for 99 cents.

But they’ve got the CD.

But, after downloading iTunes and listening to music on your computer, suddenly you don’t want the disc.  It’s as superfluous as those CDs that software companies used to distribute their programs on.  Why now you just download files from the Web.

So, all around, things are bleak for the record labels.  They’re selling tunes in an obsolete format and the thunder comes from a completely different kind of entertainment medium.  Looking to protect their old business model, they’re trying to sue into submission customers who have adopted new ways of acquisition they’ll never give up and are trying to monetize and protect elements of band promotion that are hindering the breaking of acts.

Copy protection at mtv.com.  Isn’t it interesting there’s no copy protection at comedycentral.com, another Viacom property that DOESN’T rely on the music business?  If ONLY people would steal and send videos to other people.  We call this viral marketing when it’s in the physical world, how come it’s CRIMINAL BEHAVIOR in the online world?

The hardest thing to do is get someone EXPOSED to an act’s music.  To hold them back from it, to limit the possibility of exposure, makes no sense.  Certainly not for companies like NBC.  Whose "Lazy Sunday" SNL skit injected new life into a tired show via ubiquitous distribution on the Web.  NBC reacted by sending a cease and desist letter to youtube and then putting the video on THEIR SITE ONLY!  As if nbc.com was a regular stop on the surfer’s rounds.  No, you’ve got to put the product where people AGGREGATE IT, presently youtube and google video.

The product was originally at Napster.  ALL of it.  But then the labels parceled it out to many sites, none of which have any significant traction other than iTunes.  The key is to create BEHEMOTHS, one stop shopping, not a bunch of out of the way loser 7-11s.  Maybe there’s only room for one online store, but by insisting on copy protection and sale at a high price the labels have given the power to Apple, Apple hasn’t taken it.  The end run would be to authorize another way of acquisition, one without copy protection, that would allow people to have a lot of material at a low price.

And they must do this quickly.  Before their businesses are decimated.  The longer they refuse to play by Net rules, and allow consumption of mass quantities by everybody, the more they fall behind the curve, ceding the territory to all-in-one bands who DON’T MIND giving their music away for free.  THAT’S what the major labels are doing, marginalizing THEMSELVES!

Then again, the clips NBC should be distributing for free are only ads for their shows, whereas the tunes ARE the major label’s product.  Maybe that’s not such a good business anymore.  Maybe an act shouldn’t separate its rights out and give a label the lion’s share of the money.  Especially when said label is PREVENTING them from breaking by holding back their material from the masses.

Just know that the seeds of revolution are not sexy.  People are abandoning the twentieth century in droves.  They don’t want CDs and they don’t want videos on MTV.  It’s a new world.  One where a hammer of change doesn’t fall in a day but you wake up suddenly and find, like the camera companies, that your old bread and butter business, in their case film cameras, is dead.

All the indicators are that the labels, with one foot in the past, if not both, are not prepared for the revolution about to silently overtake them.  I’d say I feel sorry for them, but it’s hard to sympathize with companies living their lives according to the George Costanza loser philosophy.  Then again, maybe someone in the executive suite saw that episode of "Seinfeld" wherein George decides to become a winner by doing the OPPOSITE of what he usually does.  That’s the only thing that would work for the record labels at this point.  Good luck!