The Increasing Irrelevance Of The Major Record Labels

Music Industry

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).

Filed Under: major labels, music industry, record labels