Will the recording industry become obsolete?
Will the recording industry become obsolete, given the impact of newer technologies that allow artists to directly market their wares and consumers to choose what they want from a selection that's unconstrained by middlemen? Not likely.
Don't underestimate the marketers' ability to get their claws into anything and everything. How much of what you buy today is not advertised or promoted in any way? New technologies simply provide a new challenge for marketers. Mark my words, marketers will find a way to set their hooks into file sharing and artist-to-fan direct marketing.
How? The same way that marketing has insinuated itself into every other area of commerce: by offering the illusion of something for nothing, and by spreading FUD (fear, uncertainty and doubt). These go hand-in-hand and are a sure bet for the marketers, because they play on human nature.
Consider that you're an artist, you have a web site, and no one knows you're there. How do you promote your music? Send out a mass mailing to a few million internet users? Sure, that's an idea that no one has ever thought of before. Good luck getting past the spam filters... So along come the marketing folks, who offer to promote your site. Doesn't matter how - they'll offer to increase your sales. If you don't bite, the marketers will be certain to inform you that other artists are already enjoying greater sales because of the promotion offered by this or other marketers. Are you going to risk being left behind? Are you that well-connected that you can market your own site? And if you are, why are your sales so poor? See what I'm saying? If someone offers you a chance to increase your sales, you're probably going to take that chance.
If you're lucky, the increased exposure will improve your sales. Your alliance with the marketers will have been a success. You're happy because you get more sales. The marketers are happy because they'll probably get some repeat business from you. But it really doesn't matter how well the marketers do in promoting your product. They'll sign up more and more clients, and they'll do just fine. And if your product fails to sell, well... that's your fault, right? "The market" didn't like what you had to offer.
Counter-argument: OK, but what about advanced search technologies? Google is a good example of this. I can easily imagine an effective music search engine. Maybe it'd be popularity-based like Google, and maybe it'd use some advanced technologies to "find me more music like this". But in the end, the marketers will get their hooks into that, too. Just like they have with Google. And if you don't play the game by their rules, you'll be left behind. FUD, baby.
Finally, remember MP3.com and the myriad artist self-publication services that have sprung up from its ashes? Seems like a great idea, right? But did you ever try to find anything that you could listen to on one of those services? That's a good way to waste many hours of your life, sorting through music one file at a time. Popularity metrics are mostly useless there, because you can't refer to the opionions of a peer group of known tastes - your online peer group is global and may not share even the most basic rules of discrimination that you and your local peers take for granted.
I'd really like to think that there's a way to make direct marketing work, and that it has the potential to return control of music selection to the consumer. But I believe that the anticipated financial rewards of the mass market and the perceived FUD of not aiming for the mass market will keep corporate music marketing alive for centuries to come, regardless of the technology of distribution.