Clay Shirky's latest essay, File-sharing Goes Social is excellent and I found it really interesting (via JOHO the Blog).

Along the lines of some of the points in Clay's essay, I used to know of (but was never personally a part of) a social network of individuals who worked in the music industry and who traded high quality soundboard bootleg DATs of live shows and studio sessions of major acts. This was a tight knit group of folks who all had access to the kinds of recordings that might eventually end-up being released as albums.

The thing I noticed about this social network is that it is strongly based on trust, reputation, and something the equivalent of high transaction costs. One can only "join" by bringing in high quality materials (with a reputation that suggests you would be bringing more), and trades are based on the perceived value of particular recordings, like you aren't going to be able to trade a bad recording of a mediocre artist for ten good recordings of a real talent.

So, I never had any reputation, connection of trust, or recordings worth any value such that I might get invited to trade with these folks. It wasn't even a possibility!

Somewhat related, I see music as being a natural point of social connection. It is natural to relate to friends and especially acquaintances around shared musical tastes or interests. It seems natural that "social software" will evolve around or otherwise be greatly affected by music sharing.