Every year around this time, some know-it-all pundit writes a slogging, pointless treatise that predicts the big trends that will drive the music industry in the coming year. Such articles are seldom correct, although they often share a tinge of insight about the general course that the ever-changing industry might take. 

There are two exceptions: Either the writer in question makes such broad and obvious predictions that the piece amounts to a litany of bland blather. Or the writer posits such vagaries that the forecasts take on a Nostradamus-like quality, cleverly crafted as to always be retroactively correct.

To be sure, specifically predicting what will happen in the next year in the music world is practically fruitless. But alas, we can try to put forth a few ideas about the direction things might take—and, of course, what this means for artists, labels and the many other camps that make a living in this often low-margin and thankless—but oh so irresistible and fun—music business.

Certainly the Internet is by far the biggest, baddest, most incredibly influential monster to utterly turn a multi-billion dollar industry upside down since… well, since never, really. Anyone who wants to put up a Web site and sell music globally can do so. Anyone can share music with anyone else anywhere. Copying music is quick, easy and free.

That’s the Internet, and while it’s been around now for a while, the massive adoption of broadband services over the last couple of years has turned it into a medium on steroids. And there are now thousands of personal trainers out there ready to pump you up, whether you’re an artist, an indie label, a club owner… whatever. It’s a new world. And the old powers are searching desperately for a way to survive without the gatekeeper—and spending millions in the process.

These factors are making the Web a vital tool for independent artists in 2005 and beyond. "I have been selling music on the Internet for the past four years and have watched my own sales, and audience, grow using only the Internet around the world," says indie recording artist Stacye Branche. "With little to no money, an indie artist is able to reach a worldwide audience." Of course, the Internet can’t negate the daily struggle that all Indie artists must endure, but "the advantages such as being able to be yourself, creating the kind of music that you really want to create, and not having someone else make all the money while dictating your future, so outweigh any of the disadvantages," she says.

Indeed, Branche and countless other artists can now do it themselves without the label backing once considered crucial. While labels still can be vital in helping with marketing, promotion and distribution, the Internet has helped many artists see a future without a label (or perhaps one forged by their own hand, with their own label).

In addition, more independent artists are looking at their music as a promotional vehicle, often either giving it away online or understanding that peer-to-peer services make it almost impossible to stop people from taking it. How can indie artists adjust in 2005 as broadband networks increase the downloading phenomenon? 

"Artists will no longer prosper by selling their recorded music," predicts Jerry Goolsby, distinguished chair of Music Industry Studies at Loyola University in New Orleans. "They will prosper by selling access to their music. They’ll become more entrepreneurial in how they earn money, by selling merchandise and concert tickets. They’re not making money on CDs now anyway."

While many of these trends may scare the six-figure-salaried executives at the major labels, it may actually be good news for smaller, niche-oriented indie labels. Whitney Broussard, an entertainment lawyer at the New York City law firm of Selverne, Mandelbaum & Mintz, says that independents are gaining enormous power because of the Internet and the democratization of music promotion. "One of the big issues for 2005 will be this shift in power to the indie labels and artists," he says. None of this is to say that major labels are dead (they are still the best bet for those who want to become mega-stars). But for the rest of us, do-it-yourself or indie routes may prove a better way to make a living as an artist than in any times past.

And that’s largely because of the Internet and its nature as a cheap and efficient distribution mechanism. "In 2005, indie record labels will gain greater popularity and legitimacy among the musical establishment," predicts culture-trends analyst Mario Almonte. "It no longer requires millions of dollars to distribute a CD—just several hundred dollars for a decent Web site."

At the same time, companies are popping up everywhere to help artists better use the Web. Many, such as iTunes, MusicMatch and the countless other song download services, are well known. But even lesser known companies are making a difference. Monkeycube, for example, is a self-described counterculture Web site with 20,000 visitors per month looking to it for music reviews, among other things.

In September 2004, the company became an iTunes affiliate by embedding the purchasing links into their reviews, making it easy for someone to impulsively buy songs the minute they read about them. "To me, traditional banner advertising is a dead medium, and I strongly believe that affiliate programs will be the future of online music marketing in 2005," says Monkeycube founder Nathan Wright. "It’s very tempting for Webmasters, because if they implement the program successfully, they can start paying off those hosting bills or even create new revenue streams. Plus, it’s tempting to artists because readers can audition tracks in their homes while reading the review and decide for themselves. Plus, they can buy the whole album within a few clicks."

At the same time, the Internet holds many opportunities and challenges for the traditional music industry. Major labels, for example, are using the Web just as vigorously if not more so than indie labels and artists. In fact, Steven Rosenfeld, president of WorldWide Management and co-founder of music publisher Smoking Caterpillar Music, warns that too much reliance on the Internet in 2005 may limit reach for many artists and labels. "The move just announced by Universal, for example, to introduce several new bands online only cuts out, essentially, a still large part of the music-buying public who prefer their music on CD," he says. "Going online only may eliminate more buyers than it will entice."

Whether that’s true or not, the majors may give digital-only releases a shot in 2005: Universal’s new digital-only label is UMe Digital, which in November signed up eight relatively unknown bands in an effort to test the theory that a label can promote bands without paying to press and ship thousands of CDs to physical retail stores. Instead, UMe Digital will use its promotional muscle to get the bands up on iTunes and other download sites, as well as license their songs to TV shows and movies. On the other hand, UMe Digital doesn’t provide a big advance or many of the other perks associated with traditional major-label deals.

And that’s not the only way the majors are trying to evolve in 2005. Mitch Glazier, a vice president at the Recording Industry Association of America, recently predicted that several legitimate peer-to-peer services (with the full sanction of major and indie labels) would start popping up in 2005—allowing individuals to share songs online without worrying about lawsuits. That could put an already popular P2P phenomenon into hyperdrive, assuming the labels don’t screw it up with unrealistic restrictions or draconian digital-rights-management schemes.

In November, Sony BMG, Universal Music Group and Warner Music Group inked a deal with Wurld Media to create a new sanctioned P2P network called Peer Impact. The service plans a full launch in the first quarter of 2005. In addition, growing areas such as "podcasting," which allows a Web site to easily stream content, and other forms of Webcasting could give artists everywhere even more exposure in 2005.

Beyond Internet-specific trends, more general business changes are also driving major shifts in the music industry. For one thing, the consolidation wave that has already led to fewer major labels, radio station owners, local music promoters and even booking agencies is likely to continue into 2005 and beyond, which could further drive talent to niche labels and services.

Indie bands going out on the road face a dwindling number of clubs willing to book them. In 2005, look for even more clubs to turn from live music to a karaoke format—not the best news for indie artists trying to put together a cohesive tour.

As some segments shrink however, major label stars may even become bigger as their labels focus more money and attention on fewer acts. Established artists are also more able to monetize their fame by promoting other products. Megastar Nelly, for example, began promoting his sugary energy drink "Pimp Juice" in August 2003 and sold 6 million cans in the first year across 146 global markets.

As for sleeper trends in 2005, how about the graying of America? The traditional music industry has typically ignored older music buyers in favor of teens and young adults. But in the current environment, the young are often the least likely to buy music as they download, file share and burn CDs to their hearts’ content.

Baby boomers, on the other hand, have plenty of money to spend and aren’t as prone to using P2P services. "There has been a momentous shift in the demographic profile of music buyers," says Loyola University’s Goolsby. "Even though there has been a tremendous increase in the number of people under 25, music purchases have dropped in that age group by almost 40 percent. Meanwhile, people over the age of 40 have doubled their percentage of music purchases. In fact, people over 40 are the only people buying more, not less, music." Let’s face it: The baby boomers can still rock, and they have more money to spend in 2005 than ever.

To be sure, the march of changes that have helped transform the music industry completely in only a few short years will continue in 2005. With an explosion of broadband Internet access and usage indie artists and labels are benefiting from efficient and inexpensive access to online distribution and promotion. The next year could lead to immense opportunity—at least for those who know how to work a system that has only recently turned itself upside down. And inside out. You get the idea.

(Mike Grebb is a writer, journalist and singer/songwriter based in Washington, D.C. He has written for numerous publications, including Wired and Billboard. He just completed his debut solo record, Resolution, which is available at http://www.mikegrebb.com/).