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
    Twinrova, 20 Mar 2008 @ 12:28pm

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

    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.
    >I don't, actually. I feel I should state that I'm not an "average" consumer. I know where to get music. Do you think the iPod lovers out there really do? (not, of course, including the P2P method many use).

    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.
    >I did. But I responded to the fact the "little guys" can't compete on the same scale. Sure, they can do some good, but how many out there really do justice compared to others? A few, to say the least. Also, keep in mind that not every label will sign every GOOD artist, which instantly puts a label on the "bad" side, IMO.

    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.
    >I'm trying not to here. Really. I got the gist of this thread but I don't see labels doing any good. Do I think busy musicians should take care of their business matters? Absolutely! Because it comes down to this:
    If one isn't popular, one has free time.
    If one is popular, one can hire business managers. If this happens to be a label, then fine.

    I guess what I'm asking for here is a few labels that don't follow the typical business model.

    Note: I've notice many upcoming artists are banding together to form their own "label". Good thing? Maybe. We'll see how it does with new artists they bring on.

    Mike, I agree with your views on changes in the industry. I truly do. But I can't say that this wishful thinking is going to happen any time soon, especially when big labels are STILL fighting change.

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