What will happen to the music industry in this digital age?
You, the artist, will have more power with your recordings with this approach. You can be as creative as you want and spread your music around and no one can stop you, as they did with Nirvana's In Utero, and say that you need to change the production on this album because it won't sell as is. Perhaps we can then see individual music instead of music for the masses. Given the nature of how you can spread your music around the Internet, you will be enriching the amount of information in the net as well as reaching audiences in ways you've never dreamt of before!
In a more futuristic sense, the major record label's stronghold on what kind of music gets heard by the people will be broken. Music has become an institutionalised industry that churns out musical product. The music industry restricts copying and other uses of music in order to maximise profit, but this comes at a great cost, that of abridging the spread of creativity. This will change. It is now possible for performers to spread their musical message directly to fans via high-technology, thus enriching the artist and the music world in all possible ways. Music is about creative and passionate ideas. Not product.
That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density at any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation.---Thomas Jefferson