That situation has now changed, and it's inevitable that there's going to be a squeeze.

I think the problem is that the squeeze is not optimally applied. While we can cheer the idea of record labels (qua rent-seekers) having their margins reduced, I'm not so happy about Starving Artists being in the same situation as collateral damage. Additionally, he's observing that the labels had somewhat more utility than they were given credit for, in terms of seeking out and developing new talent. Now with youTube we're seeing Andy Warhol's prediction that 'in the future everyone will be famous for 15 minutes' come true, to a large extent - the trick is to be ready to exploit the hell out of the fame when it does come by, but not everyone works this way.

On a more general note, the inflexibility of current copyright is IMHO part of the problem. If I'm creating content then I do want some choice over how it is distributed - because I want to be rewarded for my effort - but I would be willing to give some of this up for information about how it used. The big problem with DRM was that it got in the way of legitimate uses by genuine buyers, while attempting to prevent any unauthorized use whatsoever. Now, if I'm a musician and 10,000 people download my new mp3 single while only 10 of them pay for it, that's painful.

But if, instead of DRM, we had some kind of Embedded Media Analytics, then it would help me a lot to know that 500 of the people who downloaded the song listened more than 10 times over the following month, because then I would have 500 high-quality marketing leads for my next release. The problem with the ad-based collectivization model is that you can get some aggregate data about how your media is consumed [1], but you don't get much in the way of targeted leads - the same entity that is distributing your content is inviting you to bid on ad keywords for your next campaign, and naturally they have no interest in aggregating data that comes from outside their platform, since they're selling the latform. (I don't mind to single out Google here; I'm just picking youTube as my preferred music-discovery portal. Other people like Facebook or iTunes or _____).

The hypocrisy within the tech industry is that we want content to be free or freely licensable, but at the same time we're obsessed with privacy and horrified at the idea that our content consumption could be object of outside scrutiny (eg DRM tracking of what we play in our headphones when we are out for a walk or what movies we like to watch when we can't sleep at 2am). I think part of that negativity is legitimate in that such information can be abused for repressive ends, but there's another part, less legitimate, that argues on the basis that it will be used for such ends, inevitably, and therefore any and all requests for such information are Bad. What I'd like to see is a development of Creative Commons licensing that acknowledged the idea of content consumption as a two-way street: you can legally enjoy this content for free, as long as you share some basic information about your consumption that will assist the content creator. Or you can reuse some of this content in your own project for free, up front, but any revenue that you derive from it (eg as a background track) is split with the original creator. In this world, I envision licensing being negotiated for percentages rather than expensive (and exclusionary) fixed sums that must be paid up front by the licensee, and the accounting/fulfillment taking place automatically.

This could work for software too. Imagine a Free Photoshop, that you can legally download and use without any technological limitations for free or some nominal fee like $20. But if you start publishing content and all your content is heavily massaged with Photoshop as part of its creation process, then 5% of your content revenue flows to Adobe. Or you could pay $500 and have unlimited use but only one upgrade. The model of 'free to use, but share your commercial revenue' has been around for a long time as an idea, but there's no product/platform that automates the revenue-sharing part of it and no legal framework providing the commercial predictability that would be needed for such an infrastructure to develop.

1. Youtube analytics, for example: http://support.google.com/youtube/bin/static.py?hl=en&to...