[UPDATE: Steven Levy wrote an editorial in this week's Newsweek about a tangential issue, namely how the pricing of music affects buying habits. He quotes an experiment that showed how to increase sales six-fold. Fascinating, counter-intuitive way to make more money and please the consumers.]

Consumers drive every industry, I think it's safe to say. Therefore when consumers cry out that they are being price gouged and the industry starts charging their potential customers as criminals ... somebody screwed up. And it's not the consumer, it's the marketers that are the conduit between the consumers and the product. However, the music industry still has time to fix its mistake because the technology for cutting out the middle man does not yet exist. If it doesn't, some enterprising geek will drop the atomic bomb.

I've been fascinated lately by the hubbub on the Internet, counting the nails in the coffin of the music industry. Radiohead is the most recent entity to bring widespread attention to the fact that a group can actually use the Internet to successfully sell music on their own, bypassing distribution companies and/or labels. The buzz about their new record, In Rainbows, is that it is on sale for ... whatever one wants to pay. I know that this frightens marketers. Loss of control, especially over product pricing is enough to cause cold sweats.

The crux of this utopian ideal of bypassing evil distribution companies has two implications. The first is that labels provide distribution and marketing so that we know the bands that we know, and if they go away, how will we know about new music? Because of this the creative marketer is still relevant.

Dan Auerbach, the guitarist and vocalist for The Black Keys (a Billboard Top 100 band from Akron, Ohio, signed to Reprise Records) said to me that the idea is problematic. "It seems like it would only work for established acts. If nobody knows who they are, then whoop-di-doo. But that's not going to stop younger bands from trying [to sell their music online], since their idols do it."

Sure, selling music online is a great thing for huge acts that don't really need the marketing support from labels or have people clamoring to do alternative marketing for them.

But what about your brother's band that has no marketing support? How does the marketing take place? There is hope for struggling musicians who shun the industry model, mainly sites like Last.fm. Last.fm is a social music site that could best be described as radio (without the payola) and MySpace rolled into one place. The promotional tools give me hope that there will be even better ways in the near future for bands to get publicity. Even better, marketers should be using these tools more (read: MySpace is not the only community on the Internet).

But, Last.fm does not have music download SALES. You may say, "Well, that's easy! Sell music on iTunes!" But bypassing distribution companies and record labels is a problem if you want your music on iTunes, eMusic or any other well-known service, because their music comes from distribution companies who negotiate price.

So the only other option is to sell your downloads on your own site. But where is the software to do it? Sure there are shopping cart software packages to buy, but only some of them offer the ability to download purchased content. And most cost quite a bit of money to implement, and that's only after you acquire the people/knowledge to implement it.

This is where the enterprising geek could fulfill the second implication of bypassing distribution companies, and in the process change the way people buy music. Namely, consumers might be enticed to start buying directly from musicians. All that needs to happen is one developer taking on the challenge of creating digital download shopping cart software that requires absolutely no technical knowledge to set up. Trust me. It will happen. There are some systems that are half-way there already.

A corollary is the phenomenon of blogs. Sure, the software has been around for a while to create a blog, but one needed to have the necessary skills to make one ... before Google made Blogger, Six Apart made Typepad, etc. Now your grandmother has a blog. Why? Because it's easy to do and the technology is nearly invisible to the publisher.

With easy-to-use software empowering the unknown bands to start selling because they have no alternative, and established bands using the same software to sell their music direct to the consumer because they can make more money that way, how does the industry model of marketing and distribution in one package continue to thrive? This is a lesson in keeping your business agile and taking advantage of trends, not resisting them. All companies could learn from what is happening to the music industry right now. It's a core history lesson in marketing unfolding before our eyes.

But then, maybe we should all just wait for Prince to figure it out. He was selling his music on his own site years ago. Maybe musicians do have marketing savvy after all.