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
    Hellsvilla, 19 Mar 2008 @ 1:45pm

    There's this foundation again

    The very foundation of what makes a record label a record label is what is at stake here. They cannot just change their foundation. If an artist needs publicity, they should hire a publicist. NOT someone who is good at running a soundstage to mass replication workflow. All those other things that the labels do for their "talent" is completely secondary. Its more of a "perk" than anything else.

    Someone else can supply those things for the artists that cannot do it themselves. There is NO NEED for the labels to do it. For that matter, the labels pretty much suck at those perks anyways.

    The entertainment cartel IS dying. There simply is no need for the big labels anymore. The artists are better off without them.

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