Many times, when you're too close to something, you can back the wrong horse, or generate unintended consequences. A good example is the label's response to iTune's success. They greet their #7 retailer with sharp knives because they correctly surmise that Apples more interested in selling iPods than ICP.
Setting aside the merits of either side's argument, the labels are in a great position to offer something at no extra cost, to increase margin, if they truly believe their darkest fears. Let Apple sell as many AAC files as they can at 99 cents... offer MLP's or higher rate files, and multichannel formats alongside them for a higher price. Whether that price is $1.50 or $2.00, it reintroduces iPod users (read: customers) to higher quality products.
This is important on many levels:
1) It makes more money for the owners of songs
2) It demonstrates real benefits, and value, in better sound.
3) It creates markets for new formats, and gives the market (fans) a vote on what they prefer.
4) It's a step back from the brink, and a timely vote of confidence in fans again, to give them actual CD quality music at CD retail prices online.
5) It sets an important precedent with Apple and other online retailers, whereby some legitimately
No matter what the labels do or don't do with Apple, artists must take responsibility for the products themselves. If they're cool and desireable, people will want them. The challenge on iTunes or anywhere else is loading the product with value. Value is to the beholder, which means, give fans the things they want, and the market will define it's value.
As to the specific topic of the thread, I suggest that both sides take a deep breath, and stop exchanging the same old arguments that have gotten us nowhere. We may be Americans, but we need not think like W. It's not with the labels or with the terrorists.
Expand the argument just a little. Change the terms. What if we make a critical distinction between "free" and "free-to-user"? This, afterall, is the basis of network TV, which of course is anything but free!
With this subtle twist, the argument collapses.
In truth, many self-produced bands already DO give away music. Anyone with the slightest ambition can get free music, any number of ways. We're rapidly approaching a time where artists will begin to exchange music for in-kind payments of all sorts, from all kinds of places. As I predicted in '99, anyone can get music for drinking Pepsi, already. These trends have expanded dramatically.
I'm a mastering engineer by trade, and I'm not predicting the death of physical media. Rather, I'm suggesting a shift in paradigms. Artists have always paid their own way, but now they have a bigger say, and can effectively pay up front, selling finished products. This is model allows artists to maximize what they make and how and where they sell... Anyone who's ever self-released knows there's real value of discs sold at the merch table (The fan gets a very special souvenier and you make more per/disc than anywhere else you can sell a CD). But you still have to be on Amazon, CD Baby and iTunes as well, for the impulse and review buyers. It's not either/or in anything we do today.
It's complex, and beyond a post in this thread, but my point is that directly paid-for and free-to-user music can and already co-exist. In fact they necessarily MUST (don't get me started on radio... but you see where I'm going!). I would argue the question, as phrased, is a false choice, a strawman.
Happy New Year!
-d-