The New Yorker has a reprinting of John Seabrook's article: The Money Note: Can the record business survive? because he is part of the New Yorker Festival they are holding this weekend in NYC. Today at 2pm EST he moderates a panel on this topic as part of their event series. Looks like tickets are still available if you want to go. Better hurry. You've got a little over an hour to get there.

Around the globe, the record business is sixteen per cent smaller than it was in 2000. Record labels blame the fans, for lacking the long-term loyalty to pop acts which record buyers used to have, and for engaging in wholesale "piracy" of music, either by copying CDs or by downloading music illegally from the Internet.

...Five global music companies control more than eighty-five per cent of the record business. (The remaining fifteen per cent is divided among some ten thousand independent labels.) Universal Music Group, which is owned by Vivendi Universal, is the dominant player among the majors; then comes the Warner Music Group, a division of AOL Time Warner; Sony Music Entertainment; the Bertelsmann Music Group (BMG); and the EMI Group. From the early seventies to the mid-nineties, Warner was the leading company in the record industry, but by the end of 2002, with a sixteen-per-cent share of the domestic market, the company had fallen behind Universal, which had a twenty-nine-per-cent share.

...Whether or not the record business figures out how to make money from MP3s, the format is here to stay. Just as CDs replaced vinyl, so will MP3s replace CDs. But, whereas CDs made the record business extraordinarily lucrative, MP3s are making it extraordinarily painful -- a gigantic karmic correction that may lead to a bigger music business one day, although not before things get worse. Daniel Strickland, a twenty-three-year-old student at the University of Virginia, told me recently, "Maybe it's because I'm in college and I have an eighteen-year-old sister and a ten-year-old brother, but, let me tell you, nobody I know buys CDs anymore. My sister -- she just gets on her computer, and she knows only two things, file sharing and instant messaging. She and friends go online, and one instant-messages the other, and says, 'Oh, there's this cool song I just found,' and they go and download it, play it, and instant-message back about it. My brother has never even seen a CD -- except for the ones my sister burns."