Goodbye, Atoms! Hello, Bits!

Antoine Dodson gave a defiant interview to his local TV news after fending off a home invader's attack on his sister Kelly. Now a musical remix of his statement boasts nearly 12 million views on Google's (Nasdaq: GOOG  ) YouTube -- and it may be coming to a radio station near you.

The song, recorded by the Gregory Brothers, has quickly risen to viral video fame by setting original music to auto-tune pitch-corrected news tidbits. It debuted at No. 89 on Billboard's legendary Hot 100 weekly chart. Airplay and single sales are the drivers of charting success, but this track is landing on the Hot 100 exclusively through its strong showing on Apple's (Nasdaq: AAPL  ) iTunes.

There's no CD. There's no label. There are no record-company reps lobbying radio station music directors for exposure. The Gregory Brothers -- splitting revenue on the single with the Dodsons -- are simply reinventing the way a hit record happens these days.

This radical crack in the music business didn't happen overnight. Unsigned bands have discovered that a presence on News Corp.'s (NYSE: NWS  ) MySpace is enough for the truly talented to reach out to a global fan base. As the music industry bellyaches over steadily declining CD sales, digital distribution has taken over.

It's not as if the labels haven't cashed in on the shift away from physical discs. Digital sales accounted for 27% of Warner Music Group's (NYSE: WMG  ) revenue in its latest quarter. However, the leveling of the playing field is disrupting the traditional hierarchy of power.

It's not just happening in music. Marketing guru Seth Godin -- widely followed around Fooldom -- told Jeff Rivera in a MediaBistro interview over the weekend that he's done publishing hardcover books to get his message across.

"I like the people, but I can't abide the long wait, the filters, the big push at launch, the nudging to get people to go to a store they don't usually visit to buy something they don't usually buy, to get them to pay for an idea in a form that's hard to spread," Godin tells Rivera.

This is a big deal, since Godin's 12 books have largely been brisk sellers in print.

However, it's just not worth the hassle when Amazon.com (Nasdaq: AMZN  ) and Apple are giving authors direct access to digital publishing on their own terms. The open market can then vet quality and push its own leaders to the top.

Physical media -- books, CDs, movies, software, and even video games -- have gone digital. DVD rentals have morphed into in-home streams through Netflix (Nasdaq: NFLX  ) . Big-name developers are offering up video games directly through Microsoft's (Nasdaq: MSFT  ) Xbox Live marketplace.

The cost savings are material. The future? Inevitable.

Google and Microsoft are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers selection. Apple, Amazon.com, and Netflix are Motley Fool Stock Advisor picks. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google. Try any of our Foolish newsletters today, free for 30 days.  

Longtime Fool contributor Rick Munarriz has been shopping online for about as long as Amazon.com has been in business. He does not own shares in any of the companies in this story, except for Netflix. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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