Before escaping the British Summer monsoons for the more reliable sunshine of the Turkish coast, I dropped in on Chinwag’s music event, titled, ‘Who pays the piper?’

Quite an interesting discussion from the perspectives of those across the new value chain - the world of digital music.

As Dom Hodge, from music consultancy Frukt Music, noted “We’re not in a TV or radio age any more - it’s not about push.”

Indeed, now that music is firmly entrenched in the ‘free content is expected’ online world, the drive for revenues is challenging to say the least.

Case in point - when asked how many people in the room use the Spotify streaming music service, nearly all hands went up.  How many paid the premium rate?  One.  Ouch.  The sales director wasn’t easily discouraged, however, citing that new premium services coming soon would sway site visitors into spenders.  Will CD-quality downloads and exclusive new music features be compelling enough?  If the company can capture the excitement of its new iPhone app for their premium services, there may be hope.  Yet recent revenue figures indicate otherwise with reported earnings of 14 pence per user per month.

The alternative?  Many suggested that brands will foot the bill via ads or sponsorships.  Media buying powerhouse MediaCom’s Richard Jacobs believes they will play a part.  “My brand clients are ultimately going to fund the free download or streaming of digital content,” he said.  But he also noted the limited reach and low audience participation per download and as such said, “while we are largely positive about these services we have to keep a keen eye out on behalf of our clients.”

Lest we forget, the artist, creator of this valuable content, reaps a very small portion of the money around it.

“Record companies get paid ten times as much as artists for revenues from streaming music,” according to journalist and musician Helienne Lindvall. “YouTube? I have never seen anything show up on my PRS statement.”  She believes that if fans knew the truth about how little artists are eventually paid, that they would be happy to pay artists directly.

Event chair and blogger Steve Bowbrick added to this idea by suggesting a ‘Fairtrade’ type of accreditation for music sites which gives fans assurance that when they buy music or services from that site, the artist will be paid.

All interesting to ponder and a little like my recent holiday - do we do the ‘right’ thing, support the local British economy and minimize our carbon footprint by staying in the UK and going on a camping holiday or to the beaches of Devon?  Or take the cheaper, sun-guaranteed alternative of the beaches of Turkey?   Sun in July wins.  For the music industry, there will be rewards for those who strike the perfect balance of offer, experience and value.

Interesting to see that Mike Jones has stepped in as COO of MySpace. I met Mike two or three years back when launching several social networking websites, and worked closely with one of the companies he founded, Userplane. They offered a great chat product that was well ahead of its competition at the time and it came as no surprise to me that Userplane were acquired by a company like AOL.

At that time, just four years ago, MySpace was the social networking leader vying for dominance with VC investment darling Friendster; and Facebook was a closed community only for college students.  How the landscape has changed for all companies.  It is a not-so-subtle reminder how quickly the digital media environment evolves.

The executive changes at MySpace mark a watershed moment for the digital music industry.  MySpace’s success is rooted in music, as we’re all reminded every time we land on the site to hear a new track or seek out a new band.  However, it is a social networking site and as such, must generate revenues from its user base.  Unfortunately for MySpace, advertisers are leaning towards Facebook, which boasts an older cash-spending demographic.  As new CEO Owen Van Natta seeks to bring some of his Facebook experience to MySpace, it will be interesting to see how the music plays out.

It’s no easier in the digital music distribution arena.  Apple’s leadership with iTunes may seem unassailable, yet it faces many threats with the rise of competitors that offer lower cost, higher quality music downloads without Digital Rights Management (DRM).  iTunes’ recent introduction of variable pricing illustrates posturing with the likes of Amazon, Rhapsody and Beatport.  Amazon’s digital music partnership with MySpace Music is also nothing to scoff at, after all MySpace has 76 million unique monthly visitors in the US alone, according to comScore.

One young London-based company blazing a trail is 7Digital, which creates download stores for record labels, TV stations, artists and brands.  The company recently announced a partnership with AOL which integrates MP3 purchases into downloads.  This is a big win that follows recent liaisons with streaming-music hot property Spotify and open source media player Songbird.  What 7Digital taps into is offering high quality DRM-free downloads in various formats - not audiophile quality yet but nonetheless a compelling proposition for increasingly discerning tech savvy consumers.

In the world of P2P, a copyright conviction in Sweden is making waves.  Four co-founders of torrent site Pirate Bay were recently sentenced to a year in jail and a fine of 30 million kroner (£2.4 million) for facilitating the illegal sharing of copyrighted material.  Some suggest that this sets a precedent that could shake the likes of Google and YouTube for leading consumers to illegal content, however, a columnist for the Register argues that these convictions are virtually insignificant outside of Sweden.  In a stroke of coincidental timing, BI Norwegian School of Management released a report indicating that downloaders of illegal music also purchase more legal music than those who squeaky clean types who do not frequent P2P sites.

So what does the future hold?  Will MySpace become less relevant in the years ahead?  Will Apple lose its lead?  Will anyone be able to halt the headlong downward plunge of music download prices? Will other artists follow the lead of Radiohead and Trent Reznor of rock band Nine Inch Nails (NIN) by offering free high quality downloads of new albums directly to fans?  Both bands have seen success in building a stronger community with fans and also selling premium priced album sets and other merchandise.  Reznor is taking it a step further with a new iPhone app that allows fans to get news, see fan remixes, stream concert footage and link up with other fans via Google Earth GPS.  Perhaps that is Apple’s trump card in the battle.  Four years from now?  It’s anyone’s guess.  What we do know is that it will be an exciting journey.