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It’s scary how much influence the RIAA still has on the music world. Ten years after Napster, high music licensing fees are stifling innovation in the online music startup world. Imeem lost tens of millions to licensing fees; a situation that chased off big name venture capitalists like Sequoia Capital. That led to MySpace purchasing the site at a firesale price of only around $1 million, according to TechCrunch. I think that high licensing fees are going to scare off a lot of future investors who want to invest in online music portals. And it’s all because the labels don’t want to loosen their grip on 20th century style mega-profits. But 20th century style profits were based on selling artificially scarce copies, and that model isn’t sustainable in 21st century media economics. (MADE)

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