Just found this, but thought it was worth bringing up...Doc Searls suggests Apple's iLife products are "Turning Consumers into Producers" and draws a parallel with the open-source development paradigm. He takes it up one level of abstraction to a supply-side versus demand-side analogy. This is very astute, but doesn't go far enough. What's been happening in the music industry much longer than the open source movement has been around, is a democratization of the market. Pro-Tools (well before Apple's GarageBand) made high quality music production possible for anyone with talent. More recently, Napster, Kazaa, and the ITMS opened the door to a distribution mechanisms with a low barrier to entry (i.e. democratic). What remains to happen is a decentralization of the power for discovering, promoting and marketing the music that can now be created cheaply and sold cheaply. My company GarageBand.com offers one model for a democratic and meritocratic discovery mechanism. The next stage in this evolution would combine our discovery method with a democratic promotion network: radio, video, and what ever newly created parallels arise. Basically, anyone could play any role in the industry with reasonable effort, so the truly talented (no matter what their means) may rise to prominence.

Incidentally, the result would be a music market characterized by something close to free and equal association, an economics alternative to both socialism or capitalism one might call "cooperative individualism".

*Another one for the smart and innovative category*

A full stocked digital music retailer started by a pair of psychologists is experimenting with dynamic pricing. At MusicRebellion.com prices for well-known tracks start as low as 5 cents (e.g. Blink 182's "Feeling This") or 30 cents (e.g. Outkast's "Hey Ya"), but increase as more people download the track. The price can also decrease as demand drops. It operates much like the stock market. This is in sharp contrast to the iTunes model where all tracks are priced at 99 cents and the BuyMusic model where labels can set their own prices. The big shift here is that MusicRebellion uses technology to decentralize(democratize) the pricing decision.