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Legend has it, the great blues musician Robert Johnson went down to a crossroads and made a deal with the devil.  In exchange for unfounded musical talent, the story says, he traded his soul.   It was a yes or no choice; be a guitar hero, or not.   He chose the immortality of his music.

The music industry is hardly so fantastic but like the legend, the thin line between the industry’s successes and failures, or evolution and regression, seems to hinge on the big decisions made when the road of progress forks.

Looking at the music business over the last decade, as its struggled to evolve to the changing digital landscape, two pivotal moments jump out.  The first was the evolution of file sharing networks and how the music industry chose to handle them.   The second was the advent of Digital Rights Management (DRM) encryption and how the music industry steered its early use.

Now, it’s starting to look like the industry is reaching a third crossroads: license fee rates for streaming services .

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Advertising is sometimes seen as the great subsidizer, the mighty and powerful Oz that can pay for all kinds of Internet media.  But Oz couldn’t give the Scarecrow a brain and advertising can’t give all Internet content businesses a good looking income statement.  Free (ad-supported) online radio stations are a case in point.  As the sites grow in audience scale, the license fees behind the music they stream grows too.  Pennies (or even fractions thereof) per song play adds up fast when millions of users are lounging in the soundscape.  Paying that expense with ad income can be a difficult calculus when ad markets are trim.

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When Guy Hands stepped out of the CEO role and become Chief Investment Officer at Terra Firma last week, the private equity firm characterized the move as an operational decision that would allow Hands to get more involved with existing portfolio companies and new investments.   He’s apparently not wasting any time. 

It was revealed today, Douglas Merrill will step down from his roles overseeing the digital business at the Terra Firma owned record label, EMI.

According to an internal EMI memo snagged by All Things D, the former Google Chief Information Officer’s departure was a consequence of reorganization.

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Until recently when Apple geared up to launch a new product it was lights, camera and action; the full-on spectacle.  Lately though, the theater’s dark.  With recent launches, the company’s opting to use a simple press release instead of a big stage show.   To start the conversation, Apple’s letting products speak for themselves.  The approach suits the newly announced iPod Shuffle just fine.  The device speaks plenty, literally.

Announced today, the new generation of Apple’s tiniest iPod is billed as “the first music player that talks to you.” 

The tiny device features a Voice Over feature that acts like something of a virtual DJ.  Push the control button and it will call out the track name and artist of the song playing. Push it again and it can provide battery status information or even identify the names of different playlists.

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Music videos are among the most popular clips on YouTube but the battle to keep them there is getting more and more contentious.  Back in December, faced with failing licensing negotiations, Warner Music, pulled its programming off of the site.  Monday, it was Google playing the role of the aggressor. The company took a hard-line stance with the UK’s royalty collecting body.

After failing to reach an agreement with Performing Rights Society for Music (PRS), Google said it would block UK users from watching premium music videos on its YouTube site.

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In early February, Microsoft announced plans to create original video programming for its Zune media player.  The concept seemed a wild tangent and the question at the time was: why? Now, there’s more of an answer: it’s not about the device.

Microsoft has quietly broken its Zune group into two separate units, one software and services focused, the other hardware.

The hardware group will now work out of the Windows Mobile organization.

The software team, which will be under the watchful eye of Enrique Rodriguez, corporate vice president of Microsoft’s TV business, will focus on a broader converged entertainment offering.

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According to a regulatory filing cited on Venture Wire, Slacker, a multi-channel digital music service, has taken an additional $5m in venture funding in a bridge financing from existing investors.

Since opening its doors and publicly launching its product in March of 2007, Slacker has now taken on a cumulative total of more than $58.5m in financing to build out its ambitious plans.

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