The Recording Industry Association of America (R.I.A.A.) has quietly ended its campaign to sue illicit digital music sharing into oblivion, the Wall Street Journal reports.

The first R.I.A.A. lawsuits were filed in September 2003, against individuals allegedly caught sharing music illegally online. By the time R.I.A.A. halted its legal campaign this past fall, they’d managed to issue 35,000 suits, win none of them, spend more money on legal fees than they recovered in settlements, and plunge the industry into a public relations quagmire — all the while failing to stop either music piracy or the continuing decline of CD sales.

Meanwhile, innovations in legal distribution of digital music, especially music-based video games like Guitar Hero and Rock Band, have fueled a major rise in legitimate purchases of digital music, outside the music industry’s traditional business model.

To get a sense of the marketing power of these games, consider this: after Aerosmith’s song “Same Old Song and Dance” (released in 1974) was released for Guitar Hero, online sales of the old song surged, up 446 percent on iTunes and other legal sites for the two months after the Guitar Hero release.

Independent record labels are coming into their own, eating away at the market share of the four major music conglomerates. Musicians, from Radiohead to Jonathan Coulton and many others, are striking out on their own, distributing music themselves online, without having to give up any of their earnings to a label.

With these innovations changing the way we listen to music, and with more on the way, what is the likelihood that major record labels become as superfluous as full-fee real-estate agents, whose commissions rarely add value for homesellers?

Posted by: Amy Sikkes

Source: http://freakonomics.blogs.nytimes.com/2009/01/19/are-record-labels-the-new-realtors/

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