Warner Music Group's Lyor Cohen, who came up the ranks as a hip hop artist manager and then exec at Def Jam, has a piece in Forbes (registration required) in which he assesses the state of the industry's artist discovery networks. The established network, he wrote, is "at risk of collapsing under its own weight." He calls for the industry to reinvent the discovery process and take advantage of the smaller networks that already exist around the country. Online and wireless is changing how labels find and promote artists, and he claims "Warner is ready."

The last part of the article is Cohen's attempt to de-hype Web 2.0's importance to the A&R world.

"And yet, the Web is also a limitation. No matter what people say about the power of sites like MySpace and YouTube, you can't absorb the essence of an artist until you see him or her perform live. And you can't determine if their following is genuine unless you experience it firsthand. In the 1980s an interactive video channel called The Box emerged as a possible platform for hip-hop. The labels and artists' managers soon discovered they could "jack" The Box--hype results by having a group of people phoning in to order the video plays. Today we're seeing similar distortions on some social networking sites. That's another reason that live performances tell you something. Live doesn't lie.

As much as technology transforms the world, as powerful as all these peer-to-peer or social networks are becoming, the most important network is still composed of real, live people dealing with one another face-to-face. Showing up in person still matters. It's true in friendship. It's true in business. It's true in music. When certain people walk into a room, molecules change, energy shifts--and things start to happen."