Somewhere between then and now the music industry almost died. Did it happen because of the digital revolution or because the revolution passed up the music industry? The fundamental dynamics by which consumers discover, digest and distribute content have been irreversibly changed.

Technology makes for a fickle bedmate. On the one hand, if you understand how to stoke the fire, technology can reap millions for the astute business. On the other hand, if you “diss’” technology, it can turn on you like a scorned lover.

Every industry from travel, music, movies, newspaper publishing, and, heck, even software itself is being pummeled by the ferocity of the online world. This new world order has leveled the playing field for global companies of ONE versus oversized, over budgeted multi-nationals of MANY. Simply put, one smart entrepreneur who knows how to leverage the right technologies can decimate an industry.

Witness the story of Marcus Frind, CEO of PlentyOfFish.com. In the last 10 years online dating has evolved into a billion dollar industry, dominated by companies like e-Harmony, Match.com and Chemistry.com. These companies make millions of dollars annually, but they have huge staff overhead and spend millions of dollars in advertising to acquire new customers.

Along comes Marcus Frind (cover of Jan 2009 Inc. Magazine). He decides that his dating service should be free … nada … zero. The result? 1.6 Billion … yes Billion … website visitors every month … $10 Million in annual revenues … 50% margins … 3 employees. What does he sell? $180,000 a week in advertising sales. Why do people pay him for this privilege? The demographics and the traffic are an advertiser’s dream come true.

Throughout the years, the music industry, like many others, has struggled to keep a tight grip on its intellectual property … and, rightly so. Singers, songwriters, and musicians all have the right to be paid for the work that they’ve lovingly produced.

The problem? Technology has leveled the playing field. Now a musician who wants to get his or her music “heard” can just plug in a mike, flip on an electronic keyboard, switch the dial to record and upload to YouTube or Vimeo … Voila, instant “channel”. In this era of digital music uploads and downloads, the world is literally ones oyster.

Instead of imposing artificial constraints, such as digital rights management (DRM), inflated prices or limited availability, the music industry should re-invent itself as the Industry of Music. The magic switch is to think of music as just one component of a broader merchandising platform. For example, sell a 99 cent (or less) song, follow it up with a $9.95 e-book, then a $4.95 fan base newsletter, a $30 / month coaching service, and so on.

The key is to grow ones subscriber / fan base. Then build a relationship with the base by continually “touching” them with quality content. Once trust has been established with this community, complementary products and services can be introduced and sold. The mantra? Sell plenty of fish to selected, qualified markets, rather than trying to sell the same fish to every market.

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