At my job we build websites for people. I originally got into website design not to pay the bills, but because I really felt passionate about what websites could do for musicians (including myself). I envisioned that an artist would put up their website and immediately have the tools to publish audio, video, images, news, email lists, flyers, communicate and sell directly with their fans and visitors.
Somewhere along the way I think the hype got to me. Sites like MySpace.com, YouTube.com, Imeem.com, and catalog sites like Rhapsody and iTunes made me rethink this scenario. I began to think that a centralized service site for artist tools was the answer - a site that would provide the capabilities in the first paragraph but one which would be free and ad-driven. The site owner would make tons of money off ads to run the site, the artists would get lots of eyeballs and ears and as a result would sell more music, with maybe a percentage cut given back to the host site for handling the sale. There are already many retail services attempting to do this: Snocap/MySpace, CD Baby, and iTunes come to mind. But the problem with these centralized services is that they essentially own the content you produce or have potentially sticky licensing contracts once you use the service. I started to realize that in order for a centralized site like this to work, it would essentially have to exploit its very users to stay afloat. (This site explains this concept in more detail, although I disagree with the conclusive predictions the author makes.)
Going back to the most basic questions:
a) How do musicians publish their work and support themselves?
b) How do listeners find new music?
To answer the first, I would argue that any semi-professional musician that wishes to build a career off their work should establish their own unique website. It is more work but the benefits are tremendous - the artist maintains complete control over their work and can determine exactly how their work is published, distributed, licensed, and sold (even setting up their own storefront). The idea should be that this site is the *exclusive* method for updates, downloads, and sales of music. Why? Because having one strong website identity will mean the artist will maintain more control over their work. Online retail stores and social networking sites are a waste of time and should be avoided as much as possible unless they are able to ultimately drive more traffic to the artist's core site. Put the minimum amount of effort into these third party sites, and maximize the effort into making the core site kick ass. The web is a giant time sink and people make money off of this fact...your time is literally making people money. It's something to keep in mind when browsing the web.
The cost of building a website is becoming less and less as hosting gets cheaper, and the technology keeps getting better and better. This means that it is now possible for an artist to setup their own website with the capability for direct online sales, downloads, blogs, forums, email lists, tour schedules and much more. Instead of using Blogger for blog posts, you can run your own blogging software. Instead of uploading music to MySpace, upload as many tracks as you want to your own site. Instead of depending on these third party companies which can change their policies, you can do it yourself and have more control over everything.
To answer the second question, I think people will discover music the same way they always have - friends, music blogs, email threads, shows, music aggregators, radio, search engines, magazines, and review sites. I doubt that any automated system can really compete with a trusted friend recommending their favorite band, or a good DJ playing their favorite music. What the web *can* do is streamline these sorts of organic interactions. It can also organize the immense amount of music that is out there. It's amazing to me how many new sites pop up which try to build centralized music catalogs. The web *itself* is an enormous decentralized music catalog, it just needs to be indexed and organized. Search engines work this way - there is no reason internet radio, or Last.fm can't work this way too. One of my favorite sites that treats the web itself as an endless catalog of music is the Hype Machine. This site essentially scrapes quality music blogs for any MP3s and then lets you immediately listen to a stream of new music. You can narrow down by artist or song name. Simple, trustworthy, decentralized, scalable and powerful. Another site that supports this concept is Del.icio.us, where you can bookmark MP3 files you like and other people can listen to your "radio station". A link to an MP3 file should be all it takes to publish your work to the world - it's the job of these sites to find, index, and organize them.
Here is the point - if an artist has the capability to publish their work directly, then other music sites can literally just link to the original artist when talking about them. Music blogs and review sites will be more inclined to trust and link directly to an artist because the quality of content is higher and more trustworthy. The result is increased traffic to the artist's core site where they can build a fan base, get people on their email list, get a street team going, or sell music CDs or downloads. Contrast this with a music review site linking to an artist's MySpace site, where there are a limited number of things that can occur. Aside from adding somebody as a friend and previewing some tracks, there isn't a whole lot else that can happen. As an artist you want to provide an honest and enveloping experience for potential fans, and with sites like MySpace you just hit a brick wall.
It may sound like I'm putting down social networking sites, but I'm not. They work very well for their intended purpose - connecting people. When it comes to music publishing however, I don't think these sites work very well because ownership, licensing, sales, and distribution of the work gets complicated. Plus, it is just hard to maintain content across five different social networking sites.
By publishing directly on their own site, an artist can specify the license of their work explicitly. Probably the best approach would be to give published works very loose distribution licenses so that the music can spread freely across the net and other music sites can pick up and distribute it.
I don't think I'm making any sort of astounding discoveries - I'm just trying to take a step back and think about things. Just think about it next time you buy a song on iTunes. Why are so many middlemen involved in that transaction? How much is the artist really getting and who decides how it is licensed? Or the next time you visit a MySpace page, think about who really benefits more from you visiting the page. That band you are checking out, or Ruport Murdoch?
It just seems so much simpler for an artist to publish and sell direct and sidestep all of the bullsh*t while simultaneously earning more money and decreasing the amount of time spent managing their website(s). Less time dealing with this crap means artists have more time to focus on what they do best: make music!