Quincy Jones on the shifting digital media business

Quincy Jones knows music. He did, after all, help craft Michael Jackson’s biggest albums, co-produce the musical “The Color Purple,” and pave the way for today’s mega-producers like Timbaland and The Neptunes.

So Jones also knows when the music business is in rough shape. This is, he said this week, the most complicated climate for music he’s ever seen.

On one hand, the Internet has allowed new songs to spread across the world in hours rather than days. On the other, illegal downloading is still rampant at a time when young consumers approach music from an entirely different perspective. “You’ve got whole generations of kids who don’t even know we ever used to pay for music,” Jones said. “They’ve never seen vinyl, never seen black-and-white TV. They think Michael Jackson’s white.”

But that doesn’t mean Jones is living in the past. Despite the uncertainty, Jones, 74, is moving further into the digital realm. On Tuesday he released the first episode of his new video podcast, a behind-the-scenes look at his recent collaboration with vocalist Celine Dion. In the candid video, Jones compares Dion to Ella Fitzgerald and Billie Holiday, and jokes with her about how loudly she should sing a line in the song, "I Knew I Loved You." The next episode arrives August 7. (If you have iTunes installed in your computer, launch the podcast by clicking here.)

On July 31, the same day Apple (AAPL) announced that it had sold 3 billion songs through its iTunes Music Store, I talked to him about iTunes, Google (GOOG), and how the music business is shifting in the Internet era.

ON APPLE:

Jones said he expects some of the most successful new business models for music to come from the music community itself, not from technology companies. “A part of me says it’s like a vaccine, it’s like something that’s already there that we haven’t thought of,” Jones said. A key will be harnessing the Internet’s power to distribute music, rather than trying to fight it. “We have to find a business model, man, that will build with the distribution platform. The flaw is with the distribution platform, it’s not of imagination. … After Sean [Fanning] did Napster, you’re not getting that genie back in the bottle. … Most record companies are in total denial – and I don’t mean the river in Egypt.”

ON GOOGLE:

Jones wasn’t the only artist to have a big week in online video. Hip-hop producer Diddy this week has been using YouTube to find a new assistant, and rappers 50 Cent and Common are using YouTube to find new talent. Jones said he sees potential in using the wisdom of online crowds on sites like YouTube to help talent rise to the top. The best talent comes through references. “In the 60 years I’ve been in business, I have never ever received a cassette or acetate or CD of somebody that I could use. It always came from another pro,” he said. Jones recalled one day at a funeral, he was sitting in the front on the right side, with Stevie Wonder seated behind him. A woman slipped a cassette into his pocket. “Every bathroom you go in, you get the CDs.”

But the most important thing, Jones emphasized, is that the Internet is a communication medium that's exposing people all over the world to new types of music. In his recent trips around the world, he said, he marveled at how people in every city had seemingly embraced American music as their own. "Kigali, Rio, China, Moscow, it's all the same," he said. "It’s not about politicians, it’s about communications."