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

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  1. icon
    Mike (profile), 20 Mar 2008 @ 9:19am

    Re: Mike, I'm stunned at your position on this.

    Okay, let's face it. Most of us here have been listening to music for quite some time. But the question really comes down to HOW are we listening to this music?

    I'm not sure what that has to do with whether or not music labels remain.

    We had NO control over what was played on the radio, obviously, and this was always dictated by the labels. If a teeny bopper is hot, despite the fact her lyrics blow, she's on the radio while very, very talented (but unattractive) women struggle to become "mainstream".

    Then don't listen to the radio. I don't. There are many other options these days. Again, though, that has nothing to do with whether or not there are music labels.

    The labels have, for years, screwed over both the artists and the consumer. To think that even ONE artist should sign with a label is appalling

    Did you read my post or just the title? I'm talking about labels that actually understand and work within the new business models we're talking about.

    It's difficult to respond to you when you seem to have made your conclusion based on the title, not the post.

    Mike, I can't agree with you on this one. Even if the labels "reorganize" to a new business model, you can bet they're still going to take the bigger piece of the pie and consumers will be forced to pay it.

    So you'd prefer busy musicians spend all their time handling business matters rather than writing music? There's a place for labels that understand consumers and understand how to treat music fans right.

    Consumers who pay .99 for a song are being fleeced and this price is due to the royalties charged by the labels. So why is it that artists continue to feel cheated by the labels so much, THEY'RE the ones stepping out to make new business decisions?

    Clearly, you didn't read my post. I absolutely agree that labels have made dumb decisions, but don't confuse dumb decisions with the concept of a music label.

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