1. A Brief Overview of Digital Music Today

Although peer-to-peer networks, such as the old Napster and Kazaa, drove the mass popularization of digital music, today it is clear that legal digital downloading is here to stay. Apple iTunes alone sells over 1 million songs daily, and subscription services such as Napster, Rhapsody, and MusicNet each boast several hundred thousand monthly subscribers.

While peer-to-peer networks enable illegitimate file-sharing without compensating artists, they did nonetheless teach independent rightsholders some important lessons. First, the networks established that music fans love downloading digital music. Second, the Internet will continue to play a larger and larger role in the music industry. Independents have quickly picked up on this, and were the first to really maximize the use of the Internet and file-sharing as a promotional tool. However, the problem remained that the artists, record labels, and songwriters who made the music still weren't getting compensated.

Enter the legal download services. These services, along with portable digital music players, have been steadily growing in popularity since their inception. Their appeal is undeniable: No "Trojan Horses" or dummy files that corrupt computers, fast and reliable downloads, high fidelity audio, organized catalogs and affordable prices. Giants such as Microsoft, Wal-Mart and Sony all believe in the future of download services and are investing heavily in digital music. Unfortunately, the existing digital music services, as well as the many organizations that manage and administer the rights and royalties, are almost entirely focused on the major labels and mainstream music catalogs, leaving most of the independents out in the cold.

Independents collectively represent over 20% of the total music market, a share that represents billions of dollars of business every year. As the digital music services mature, it has become increasingly important for them to include indies in their catalogs.

Opinions about digital music and file-sharing within the independent music community range across the spectrum, it's seen as a terrifying plague by some and as a great new promotional vehicle by others. Regardless of the stance, the one thing that most independent labels and artists agree on is that they want to get paid for their work—to be able to make a living from what they are most passionate about. Most also recognize that digital music will play a very important role in the future of the music industry.