Evidently CD sales have fallen by 20% in the past year, with the increase in digital downloads (measuring 10 song downloads as 1 CD) only compensating for about half of this. This brings to mind one important question: who cares?

Consumers certainly don't. Forgetting about illegal downloads for one minute, a clear reason for the decline is that large numbers of people are now just legally downloading the one or two songs they want from an album rather than having to pay for unwanted filler. Buyers are no longer over a barrel. It wouldn't surprise me if this effect accounts for most, if not all, of the missing 10%.

How about the artists? Well, no-one is going to volunteer not to become a multi-millionaire, but I'm pretty sure that most musicians do not get into the business for the money. They do it for the love of it. Anything they get back is a bonus, and the chance to make a living doing what they love is enough for most. They all dream of the millionaire lifestyle, but only brand-growing celebrities and manufactured boy/girl bands go in to the business with any realistic thoughts of such outcomes. In short, the thought of Justin Timberlake losing 10% of his royalties does not make me lose sleep at night.

That leaves the record companies. They most certainly care, and they know that the good times are over. I don't think music fans should shed many tears about this. These companies have a pernicious record of selling their artists down the river and squeezed as much money out of their customers as possible.

The big problem raised concerning this scenario is that bands struggling to break through, and the smaller labels who promote them, will be washed away with the bath-water. While this is clearly a concern, I think there are grounds for optimism, as long as artists have realistic expectations about their earnings potential.

Let's imagine a scenario where record companies are wiped off the face of the earth. Musicians now need to promote their music themselves. They can tout their music to the media and/or play live. The first option is now greatly democratised through new media opportunities on the internet. In parallel, the traditional development of a reputation through live performances can complement this online presence. Bands such as the Arctic Monkeys and Lily Allen have built their fan-base online through word of mouth. The Arctic Monkeys backed this up by builing a name for themselves on the live circuit in Sheffield. By the time they came to play their first London gigs they found they were already a legend.

In reality there will always be a place for the labels. People will always buy CDs, but the market is changing and will continue to change beyond all recognition. Those of us who frequent the blogosphere are having a sneak preview of some of the future developments. We can expect a good proportion of the top bands of tomorrow to follow the same kind of route to the top as followed by Boing Boing, Daily Kos and Instapundit. The decline of the traditional peddlars of popular music is not necessarily bad news, but insteads paves the way for a brave new world of direct music promotion.