There have been a couple of events over the last couple of days that show that the online music industry is still in flux.
- AllofMP3 Goes Down In Midst of Much Bigger WTO Scuffle
- Universal Not Renewing Annual iTunes Contract
The struggle that seems to be at play here is the struggle between content and content delivery; who dominates? Is it the content owner that has the primacy, or is it the content deliverer?
This struggle is one that we are going to see in many areas.
Many web sites owners have already handed their primacy over to Google as the content deliverer. Some of them have lived to regret this as they fall down the search rank and their business suffers.
Many retail businesses have already handed their primacy over to eBay as the content deliverer. Again, some have lived to regret this as eBay changes its policy and their business suffers.
It’s difficult to know whether the advertisers still have primacy over Google, or whether it’s Google that now has primacy over advertising.
The music industry seems to have decided that it is going to fight to retain primacy. Whether they are successful or not remains to be seen.
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Graham Chastney 
Updated news perspectives:
1) as AllofMP3 dies it springs up elsewhere under a different name.
2) The Universal Music item is basically that they are not renewing their long-term (2 years) contract. That does not mean that they are pulling out of iTunes Music Store (iTMS).
The part of the music industry – the circular-plastic-selling bit – is still trying to desperately maintain their primacy. They are struggling with the change from bits of plastic to streams of bits. They struggle with the tech (shifting bits over many different methods – internet, mobiles, cable, TV, etc. to a multitude of platforms – computer, appliances, phones, etc.); they struggle with the mentality of ownership (eg DRM); they struggle with the shock of the change and the diminishing market for their existing products (ie bits of plastic).
However, the rest of the music industry is vibrant – concerts, festivals are up; more music is produced. iTMS is one way for the publishing part of the music industry to effectively sub-contract distribution using bits. It is dominant in that marketspace, but I guess that Universal are trying to squeeze more out of Apple and their customers on the iTMS. The AllofMP3 is another story and in someways similar to the recent legal news against CD-WOW – who ship bits of plastic – though that is more a question of retailers fighting than the music industry.
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