Is digital music trashing the traditional music industry, at the expense of high fidelity? Hisham Wyne finds that it's not quite that simple.

By 2007, the music industry collectively realised something was very wrong. Prince, the '80s icon who redefined soul and R&B, gave away his latest CD for free with each copy of UK newspaper The Sun. Radiohead, the popular alternative rock band, opted to let fans decide how much to pay for their latest album online in a standard they optimistically described as "honest box". Contributions ranged from a generous £50 (Dhs394) to a miserly zero. And Oasis, the quintessentially English rock band, launched its single Lord don't slow me down solely as a 99 pence (Dhs7) download.

What prompted mainstream artists to become overnight mavericks? The answer is in the changing technology at the heart of music distribution.

Online distribution, both legal and illegal, is the many-headed hydra stirring up the waters of the music industry. Labels, retailers and even some artists initially decried what they saw as unreasonable rebellion, threatening anarchy and a decidedly evil prank on those whose livelihood came from hocking CDs to music fans.

Music lovers, on the other hand, had reactions ranging from bemusement to complete ecstasy. New technology meant a reshuffle of the distribution deck. Many artists realised that new technology helped them avoid record label tyranny and distribute directly. Users decided that online music and compressed formats were more than good enough. For local artists, online music distribution became a way of getting in touch with a global audience. Lesser known artists and fringe bands began releasing their tracks on the internet for free, hoping for recognition. For many, potential commercial losses are offset by the ability to put their music within reach of a wider spectrum of listeners.

There were two near-simultaneous changes that drove artists, record labels and distributors to distraction. First, legal and illegal online music downloads spread like wildfire. While some companies launched legal services like Apple's iStore to take advantage of the new downloading craze, most watched helplessly as listeners shared their music digitally through file sharing applications and hard drive swaps.

Goodbye high fidelity?

Second, listeners became strangely satisfied by average quality sound, quite contrary to other media. Video, for instance, is still marching a relentless beat towards better quality, with High Definition (HD) and gigantic flat screen plasma TVs with gorgeous fidelity. But music lovers have instead come to adore their Mp3 files, replete with static. Devices have become smaller and smaller still, and boasting rights are now given only to users carrying thousands of songs in gadgets smaller than the average business card holder. High fidelity has been tossed by the wayside for average quality play lists that help you get through Sunday morning rush hour on Shaikh Zayed Road.

Record labels tried to cope. Some US-based ones decided to go on a witch hunt. In 2007, the Recording Industry Association of America (RIAA) sued college students for downloading and illegally sharing songs. Some brilliant marketing wonk had obviously decided that recouping the cost of a few unsold CDs was more important than avoiding universal hatred from customers, and so dragged dormitory students to court in what was perhaps the smartest business move of the decade. It is highly doubtful that the out-of-court settlements, ranging from $12,000 to $17,000 a student, increased the RIAA's popularity or made listeners sympathise with it.

Other record labels, including some specific to the Middle East, took the measured response of diversifying revenue streams and making sure they grabbed their share of the online market. Revenues lost from CD sales were sought elsewhere. Merchandise became a profit centre, concerts more frequent and, according to Elie Al Massih, marketing manager of Virgin Megastores, UAE, online distribution more important.

"Record companies actually support online music by providing digital rights to sell music and sometimes exclusive rights to sell particular songs. Record companies do not need to compete with online music companies in terms of sales as revenues from online music sales add to their income."

While the commotion by the RIAA might make you think that not a single CD will be sold anywhere in the world in the near future, the truth of the matter is a bit more nuanced.

Listeners worldwide are still buying CDs for the legitimacy of a physical format with bona fide poster art and covers. But they are using online music formats to experiment, listen to artists outside the mainstream and discover new genres. Increasingly, CDs are being purchased after listeners have found artists through online music channels.

And CD sales in the UAE are actually rising, with Al Massih noting, "CD sales at Virgin have increased by four per cent from 2007 till now."

Music's aesthetic value

Consumers here may like their digital music, but are also fond of tangible libraries that can be prominently displayed and admired by friends. It is, after all, hard to boast about invisible digital files to every new love interest. "Consumers buy CDs for emotional value, presentation and better quality music. Virgin's customers are more collectors than consumers and they like to have their own physical libraries," Al Massih says.

Despite CDs holding their own in the UAE, there is little doubt that online distribution channels have changed the way music is purchased and consumed. The phenomenon of digital music, acquired through online sources and stored in impossibly small devices, is here to stay. Even DJs, those pedantic purveyors of sound, are being won over.

Adam, resident DJ of the Paranoia event at Keva Lounge and Warped at Touch in Dubai's Four Points Sheraton, admits that many disk jockeys are moving to digital storage and online purchases. "There are many services that sell high quality tracks online. Meant for professional use, these tracks do not compromise music quality and are available in different formats, depending on preference. It really boils down to flexibility and convenience. DJs tend to travel a lot, and it makes sense to carry four days' worth of music in a laptop and couple of CDs rather than lugging around an entire storeroom of records. And there is less fear of losing your entire career at a crowded baggage carousel in Timbuktu."

The numbers of professional sound jockeys shifting to digital storage and online music are on the rise, he says. "The entire process of finding good music has become so much easier. There is no waiting; a track released in the morning is available as a high quality download by afternoon. There is more freedom to pick and choose, and mix and match." In true purist style, Adam looks down on DJs who play sets solely from their laptops. He shifts music from his laptop to time-coded CDs in real-time so he can still use the physicality of a conventional mixer and turntable while playing his sets.

The song remains the same?

It may be too soon to consign CDs to the rubbish heap of history just yet. But at Virgin Megastores, Al Massih combines pragmatism with prognostication in casting for a formula for sustainable future growth.

"We are not predicting a dip in CD sales any time soon. We are, however, aware of the potential changes in terms of retail formula impacting the industry. Though we have always had a strong electronics department, we have also been steadily diversifying our range of products... we are also gearing up for digital downloads to hit our stores."

Meanwhile, we will continue trundling along Shaikh Zayed Road counting our online music blessings.