Adopting New Music Business Models Doesn't Mean The Death Of Record Labels

from the not-at-all dept

There is this incorrect impression out there that, just because I think many record labels have made strategically poor decisions, I think bands should go without record labels in attempting to adopt the new business models that are out there. That's not the case. In fact, I think there's a rather large role for what used to be a "record label" to play in this new ecosystem, and have said so before. Some musicians can try to go it alone, but for many it doesn't make sense. These new business models still require plenty of business smarts and the ability to do marketing -- and that will require experts in those areas. It's just that the expertise needs to be in applying those skills to the new business models (using the content as promotional material and selling scarce goods), rather than the old model. So while we often point to artists ditching major record labels, it's only because those record labels have failed to adapt, and ditching the labels is the only way that some artists are able to try out these new business models.

So, I find it odd when people suggest that a band signing with a record label shows that somehow the model we discussed "failed." Case in point, a commenter on a recent story pointed to a blog post by Chris Anderson about a band he wrote about in his first book, which had originally turned down offers to sign with a record label, but has now changed its mind. The commenter suggests first that I ignored this (when I hadn't yet seen it) and second that it goes against my theory. It absolutely does not. Nowhere have I said that bands should ditch their labels. In fact, I've said that they should sign with labels that recognize the new business models and can handle the "business" side of things, while the musicians focus on making music. In fact, we've highlighted labels such as Nettwerk, that seem to recognize this.

So, once again, for the record: the positions we take around here aren't "anti-record label." They're not even "anti-RIAA." They're actually pro-music, in trying to guide the way for musicians and record labels alike to embrace new music business models that allow them to grow, while giving fans what they want. It's not a zero sum game where one side wins and the other loses. If you understand the economics and the business models, everyone can do a lot better in the end.

Filed Under: business models, copyright, economics, free, music, record labels


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  1. identicon
    Douglas Gresham, 19 Mar 2008 @ 2:54pm

    Re: There's this foundation again

    Yes and no, Hellsvilla. The record labels (particularly the big 5) have made their business a cartel by effectively controlling distribution and supply. In the New World Order of free net distribution, they obviously can't do that, so they can't control in the way they're used to. Moreover, you are musicians don't need a label in order to get their stuff out there. That doesn't mean that artists are necessarily better off without labels, though, as the article points out. It just means that the labels have to demonstrate tangible benefits to musicians rather than rely on their old, artificially controlled business model to ensure there's no choice in the matter.

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