According to the leading industry experts, the biggest problem in music industry is the issue with transparency. Due to the fact that all the data is stored using legacy systems and very inefficient processes, not only it is impossible to track who owns what, but it is also impossible to enforce. Those legacy systems aren't interconnected, and are closed for the outside viewers. It hurts not only on the financial side, but also by denying the artists feedback on how their creations perform.
Another problem is with the fact, that most of the industry is centralized in the hands of three huge "Major" music labels. While it allows them to easily hold the large market share unopposed, it also has several consequences, including the huge costs to enter the market for the new players, stiffling of innovation, and perhaps most important of all the huge operational overheads. All of that adds up to the fact, that even with the growth in streaming and electronic distribution the profits are dimnishing every year.
It is perhaps to the fact, that the major players are so big, so entrenched that they've lost the ability to change with the times. Instead of changing the underlying models, instead of reducing the overhead and increasing transparency, the funds are unexplicably squandered away cracking down on piracy and the like, increasing the overheads. The industry is so skewed, that artists receive about ten percent of the price that the listeners pay for their music, and that is in the best conditions.
There are other problematic areas, like the technological limitations of the technologies that the Internet is built on. With centralized protocols, the data transmission costs and bandwidth limitations mean that either the distribution for hi fidelity audio is very high, or it must be streamed in low audio quality, which is the current solution.
Perhaps this list could be expanded, but those are probably the most pressing issues with the industry. The need for a change is so great, that a lot of projects are springing in attempt to rethink these old obsolete schemes. We are one of them, and together we will be able to change the situation. Read on to learn how!