Throughout the ups and downs on the music business there is one positive that is always there. The fact that we all listen to music. How we listen is ever-changing. We’ve seen changes in carrier formats, and we’ve seen changes in the publicly available channels. The former has seen us go from vinyl to 8 track, cassette, CD and now MP3 players. The latter has moved us from terrestrial to satellite and internet radio. The next change that is coming will be a merged evolution of both the carrier as well as the channel, as we’ll move away from ownership, and towards on-demand.

In the world of TV and movies we are seeing a massive consumer shift from ownership to on-demand, illustrated by the successes of Netflix, Hulu, iTunes movie/tv store, and devices like Boxee, Apple TV and Roku. Why clutter up your house with DVDs, or even your hard drive with downloads, when you can watch nearly any movie or tv show on-demand as a stream whenever you feel like it. The same goes for books and magazines, since the introduction of the Kindle and iPad. There will always be people that will prefer the physical format of the past, or ownership in general, but the mainstream carrier format will inevitably move towards digital and on-demand. Exceptions can be made for limited edition items or even particularly engaging or beautiful physical packaging, but this will become a niche-only element of the media business.

While the music business was on the forefront of the shift from physical to digital ownership, albeit it unwillingly, we are now a bit behind on the next move from digital ownership to digital on-demand. Interestingly the reason for both the original edge as well as the current lag is one and the same: major rights holders being asleep at the wheel. Where Steve Jobs was able to take advantage of this by getting the majors to agree to digital distribution deals with iTunes, progress is now held back while they fail to strike deals with companies like Spotify and others who are able to deliver the next massive shift in user behavior.

The world of movies and TV shows have taken the lead in customer-focused innovation that utilizes on-demand delivery of their products, and they are thriving because of it. While I have pointed out before that income from on-demand services is a mere fraction of that of downloads, we also can’t deny that this (r)evolution will be happening and it’s the consumer rather than the producer that is in charge. Whatever the best value proposition is for the consumer will become the dominant form in which the artist and her team will have to offer her product.

Venture Capital investor Fred Wilson posted the following on his blog, and it mirrors my own experience. Of course Fred is not Average Consumer #1, but I believe it won’t take long until this moves from an early adopter to a mainstream attitude.

I’m going to the gym in a few minutes. I’ll bring my android and stream some music while I’m on the treadmill. Maybe I’ll listen to my soundcloud dropbox, or maybe I’ll check out the popular tracks on hypem, or maybe I’ll listen to some fredwilson.fm. I stream music on my mobile phone all the time. I don’t have a single mp3 on my android and I don’t have any desire to put any on it.

This is the future. We won’t be buying files, moving files, and listening to files. We’ll be streaming audio from the cloud onto our connected devices in our homes and offices, and onto our mobile devices at the gym, on the bike, in the car, etc. And I think mobile streaming audio is going to be huge.