The Increasing Irrelevance Of The Major Record Labels

from the who-needs-you? dept

Yesterday I attended the always worthwhile SF Music Tech Summit. This has to be the fourth or fifth time I’ve gone, and I always find that after it’s all over and I’ve had some time to think about it, I recognize one key theme that kept hitting me over and over again throughout the event. This time it was the increasing irrelevance of the major record labels. I’ve been to a lot of music industry events in the past few years, and there’s no doubt that the presence of the majors at various events continues to decline (though, they still seem to have no problem wasting ridiculous sums of money on lavish parties at some events). While the decreased presence at Music Tech might have been a result of the overlap with another industry event, NARM, which the labels almost certainly deem more important, what was more telling was the audience’s reaction to the major labels.

The “big draw” at SF Music Tech was certainly the panel in the morning that had Ben Folds (who you hopefully know), Michael Tilson Thomas (again, who you hopefully know, but if not, from the San Francisco Symphony), Jack Conte (from the viral sensation Pomplamoose) and Glenn Otis Brown (from YouTube and Creative Commons). That panel was certainly entertaining, but tragically there wasn’t very much time for any of the participants to speak, and with each one showing a video (often kinda long), the whole thing felt kind of rushed. But what struck me wasn’t so much what anyone on that panel said… but what happened as soon as the panel ended. The very next “panel” was a discussion between a guy at Warner Music Group and someone at Cisco about the “direct to fan” artist websites that Warner Music has set up using Cisco’s Eos platform.

Not so long ago, you would think that a new technological offering via a major label would be something of interest to this crowd. But, the audience had no interest at all. While the organizers tried to keep people around, lots of people flooded the previous panel’s speakers while many more quickly evacuated the room. Probably one-third of the people were still there by the time the next panel actually began. That says something. In the past, the only way to be successful in the music business was to go through the major label gatekeepers. These days, almost no one believes that any more. In fact, many have realized that the path to success often means getting as far away from the majors as possible. Even if what Warner was doing was interesting (and, honestly, what was presented was full of buzzwords and hype, but little that seemed particularly innovative) just the fact that no one even seems to care says a lot about what people think of the major labels these days.

The final panel of the day, on “Music & Money,” included both Michael Robertson and Tim Quirk — both of whom have long been critics of the record labels and their business practices. It gave them a chance to (accurately) gripe about the record labels and how they’ve spent the last decade (or longer) shooting themselves in the foot time and time again by basically killing off every innovative new startup that popped up by demanding ridiculous fees just to operate. Honestly, that panel could have been a bit more interesting if it had included a representative from a major label to absorb some of the punches (and even to punch back), but one audience question summed up the whole thing:

“If the major labels are such a pain to work with, why work with them at all?”

The guy pointed out that there are tons of independent bands more than happy to embrace innovative new services. The real answer, of course, is that it’s not that simple. While there are tons of bands that are innovative and willing to work with new services, the music business is still (even if it’s changing a bit) a hit driven business. A music service without the hits doesn’t do well. That’s just the facts, right now. If you’re offering a streaming music service or a music locker and major label content is blocked, you’ve cut your potential audience down by a ton.

But, still, the question — and the answer — is telling of the major label’s stature in the industry these days. Their position now is back catalog filler. That’s more or less how people view the major labels. There’s a lot less interest in working through the old gatekeeper system. The labels will last for a long time (though, perhaps in different forms and under new ownership…) due to their back catalog and the need for music services to have access to those songs. But I don’t think there’s anyone left out there who looks to the major labels to lead the music industry any more (except, perhaps, some out-of-touch politicians).

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Comments on “The Increasing Irrelevance Of The Major Record Labels”

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54 Comments
Anonymous Coward says:

there will always be a market for the alternative, the other option. the grateful dead through phish with a side path through frank zappa and captain beefheart. what is important to remember is that even as these acts gained fame and / or notoriety, and even as they may have walked across the path of the mainstream, they didnt represent the mainstream except for that split second. in the end, the mainstream always comes back to overshadow and render tiny even the biggest of the people who took the other path. there is always another path, and that path is often strong. just never mistake that alternate route as being mainstream because it really isnt.

Anonymous Coward says:

Hey Mike, nice blog BTW.

Quick question– What do you say to those record label morons who contend that you are a self-important blowhard with an ill-informed opinion about everything and an insatiable need to be worshipped by sheep-like fans and late-night blog boys who live in Ma’s basement?

Anonymous Coward says:

Re: Re: Re:

BINGO! How’d you know?

Mike!!! IS THAT U?? This blog is SUPER AWESOME! I mean, I can’t believe this is really your site! YOU DID A GREAT TALK!!! I’m nervous just typing, knowing you are there on the other end. Let me tell you a little about myself. I am 39 years old (pretty cool, huh, 39?) and I got your T-Shirts in XXL (both of them on eBay, of course)!!

I’m living at home, in the basement, rent free, and I’ve got cable and a plasma TV. Domino’s delivers. I guess you could say I’m living the dream. Anyway, I was wondering if you could tell us who’s the best record label to buy music from.

Chao!

Bill Werde (profile) says:

back catalog?

Hi Mike, I hope you’ve been well. Curious about something here: How can you say that labels are now “back catalog fillers” when iTunes and other digital retailers easily sell 1.5 to 2 million tracks each week, of JUST the top 10 hits? That’s all current, of course. Last week’s number one, Eminem, sold almost 400k copies of his new single, “Not Afraid.” That’s an unusually high number. But still, digital tracks chart toppers are generally selling around 250k per week. (The digital tracks chart updates each Thursday and can be seen here:
http://bit.ly/cQFMrq )
Given all of the major label talent that has been developed and connected in just the past couple of years – from Lady Gaga to Susan Boyle, Justin Bieber to Miley to the Zac Brown band – I’m not really sure where you’re coming from on this point.

Hephaestus (profile) says:

hmmm ....

You really need to point out stuff that hasnt been self evident for the last four years or so.

“Their position now is back catalog filler.”

Thats the reason for the collection society expansion. The attempts to charge people for playing music to horses, singing and humming at work, collecting on ring tones, playing for previews, and all the other idiocy they are attempting. This also wont last because of provisions that allow authors or their heirs to terminate copyright grants.

“you would think that a new technological offering via a major label would be something of interest to this crowd. But, the audience had no interest at all.”

From a psyche perspective it went from hatred to apathy for music fans in the US about 2 years ago. With the younger fans being the first, you are seeing it now because the people at these events are older and the apathy has now worked its way up into their age groups. Give it another two years and the labels won’t even show up, and if they do it will be to empty rooms.

Mike in the future do yourself and us a favor. Look at the ages of the people that show up, the ones that leave, the ones that comment and in what direction, pro or anti. It will give you a great feel for where things are going.

JHMO

Dohn Joe (user link) says:

What Determines a "Hit"?

While there are tons of bands that are innovative and willing to work with new services, the music business is still (even if it’s changing a bit) a hit driven business.

======================

Yes…and what determines a “hit”? Whether it’s played repetitively 5,000,000 times on radio stations…whom are all well greased by the labels…shucks!

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