Digital music in MP3 format has increased in popular over the past several years, as music consumers download from Internet Web-sites or trade through online peer-to-peer sharing services, which have flourished in recent years. The Major record labels argue that MP3 downloads violate copyright laws, as the record companies are unable to collect royalties on songs copied, traded, or downloaded (O’Connor).

Despite the music industry’s protests, a significant movement towards a digital music format has elevated. “Lawmakers have been increasingly vocal about their desire to see progress in the online music business, instead of a series of lawsuits and business failures” (Borland).

Independent Internet based record labels have realize the potential that the progressing digital music trend has and is supplying their custo

Internet record labels allow small and independent artists to contact the public directly, eliminating the need for manufacturing packaging, warehousing, and distribution of product. The music may be sold as a lost leader while the real profits are made with online merchandise sales that accompany the sales of online music. Many Internet label are also online music store selling MP3 file and tangible CDs (Gross). The retail music store may cease to exist or be reinvented to market music. Internet record labels aid in accelerating artists’ exposure to potential fans worldwide. Most Internet labels create host web pages for artist or include links to the artist’s own website (Digital Music). Below are a list of a couple Internet labels and a brief description.

Digital music is electronic bits of information, distributed via Internet networks, telephone lines, cable systems, and satellite transmission (Digital Music). The Major Labels considers this as a threat because digital distribution is breaking down the structure of the music industry of product based distribution. In the current business model, the Major record labels are the gatekeepers whom regulate the flow of music from the artist to the consumer (Gross). For the past 50 years, major recording companies have dominated the domestic music business, having created a symbolic relationship with music distribution and promotion partners radio and retail and acquired a significant portion of music publishing (Friedlander).

Independent Internet record labels, on the other hand, have really nothing to fear. Thus, for a number of reasons, the Internet seems to be a hero for independent labels. In an industry where capital equals success, the Internet is a champion to the small business that cannot compete financially with the big boys. The Internet does not require large sums of capital, merely good music (Anderson). Pre

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