The music industry is like a stubborn spoiled child who refuses to change and whines till it’s red in the face. Prior to the Information Age of the Internet, the Major labels would release CDs from “artists” with only 1 or 2 good songs. Even if that album went Gold (500,000 records sold in the US) it would be considered a failure. The Major labels were used to seeing artists on their roster go Platinum easily. Now you have so-called flagship artists like Keri Hilson releasing 6 videos for her debut album, In A Perfect World, and failing to even reach Gold status. The money invested in her project has definitely not been recouped.

That’s not good by any stretch of the imagination…for the labels. The artists typically get jerked on royalties anyway, so they’re used to making the bulk of their income from shows.

Seeing a huge dip in their bread and butter, CD sales, the record labels have begun to dip into every revenue stream of the artists with something called a “360 Deal.” Pretty much every new artist getting signed nowadays is going to have to let the record companies take a piece of any income they have, whereas before, it was restricted to the sale of recorded music.

The Internet has indeed leveled the playing field to the point that for certain artists in certain genres, it doesn’t even make sense to sell your soul to the Majors anymore. The fact is that CD sales are so low that some Indies are outselling Major acts. Realistically, the only upper hand the Majors have over Indies is in marketing and distribution.

With CD sales in a free fall with the widespread stealing sharing of music online since the invention of P2P software and torrent sites, many artists and musicians have been left wondering how to succeed in a failing business. Many other previously successful artists have been dropped from their labels due to poor sales. The Major labels are in a state of reshuffling their rosters and scaling back their operations in an attempt to remain profitable. So if the pros are having a hard time, how are the little guys supposed to survive? Does it make financial sense for Independent musicians and singers to try their hand in the music industry of the 21st century?

As it turns out, the state of the music industry is not bad news for everybody. As they say, desperation inspires innovation.

Mike Masnick of Floor64 and TechDirt offered up his ideas for Independent success at NARM 2009.

In the video below, he’ll explain his formula of “CwF + RtB = $$$.” That stands for “Connect with Fans + Reason to Buy = MONEY.”