A while back, I posted a news link that EMI had joined with Apple in a decision to offer music downloads without digital rights management locks. It is a significant decision as major content holders have tried everything they can think of to stem digital file sharing, but since the iTunes DRM makes it tough to play the music you buy there on other kinds of devices, now the music industry, which had always insisted on the locks, is blaming Apple for restricting their market.

But, all this time, online culture has been moving toward the maxim “information wants to be free,” while the marketplace of the future (read: how content producers monetize their work) remains unclear. In yesterday’s New York Times, Jeff Leeds reports that EMI sales were so slumped last year that the company is up for sale. Leeds notes that digital downloads haven’t made up for the shortfall in CD sales.

I’m not an expert on the music industry, but it’s been noted many times over that the costs of CDs were wildly marked up and that the recording industry was reaping huge profits without having to be smart. They were the only game in town. So, now we, the consumers of music, are meant to cry for what was actually an overvalued industry.

What should any company distributing media content expect as a profit margin in an analog world? And in a digital world? I guess in naiveté I answer that the profit margin should be about the same. Costs to produce should be about the same, costs to distribute go down but you need to spend more on advertising to compete for eyeballs in a saturated media environment. The artists should be receiving their cut (all assuming inflation, popularity, etc.).

I’m assuming a lot here, I know, but what I’m driving at is that filmmakers should be noting the mistakes of the recording industry. Films are not yet at the point where they can be distributed freely and easily over the web, so how will we handle it when it arrives shortly? Leeds’ article says, “the labels squandered years on failed attempts to restrict digital music instead of converting more fans into paying consumers.”

The article notes that bands that already had a strong fan base are still selling, so one idea is to cultivate your fan base, people who enjoy and support your work. This may be a small group now, but if you treat them well, they will be the first to purchase your work. Other ideas for tending the garden of fans for independent media artists?