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The death of the record label?

A lot of people these days seem to be writing about how record labels are dying or how record labels are evil or how the record labels want too much money. And it seems that the fact of the matter is that they may be right on all counts.

In the olden days, record labels existed for a reason – to help fledgeling artists make it big and to introduce them to a greater population of consumers than the artist could reach by themselves. This required significant investment of funds. Hoewver, it seems that, today, this model is broken.

Artists obviously still require promotion efforts to get noticed. However, it appears that the avenues through which this is occuring are changing. The basic premise still applies:

  1. Put together a band
  2. Write some songs
  3. Go on tour
  4. Repeat steps 2-3 until
  5. Get noticed, get paid

It is the “get noticed” step that seems to be changing. A few weeks ago, an article popped up about how Electronic Arts was signing artists to a music label of sorts. In this article, Priya Ganapati writes:

Until now, game companies worked with recording labels or publishing firms to get licensed or original music, often opting for new and independent artists in an attempt to inject fresh, interesting and undiscovered music in their games.

Priya then goes on to talk about how EA has basically cut out the middle man of the record label by forming their own “label” of sorts, Artwerk. Additionally, this same model is being adopted by some larger corpriations with huge marketing budgets, like Apple. Why pay the record label to license music from the artist and then have to do your own marketing for the game/product, for which the label will ultimately profit from the rise in popularity of the artist? That is simply a model that doesn’t make any sense.

Another broken model is radio. Traditionally, record labels were the might behind an artist’s radio debut, pushing out promos to radio stations all across the country. Now, with the advent of the internet and social media, it is far easier for consumers to access artists from all across the world and become exposed to their music. The RIAA is destroying “internet radio” by forcing the companies that play the artists of the big labels to pay exhorbitant fees/royalties back to the record lables. So, instead of protecting their artists and making more money, what RIAA will do is force artists to band together and form micro-labels, potentially backed by the big corporations and game makers, perhaps in a form of symbiotic-promotional entity that promotes the music/game/product in order to promote the music/game/product.

But wait, micro-labels have existed forever. Let’s revise the table from above, shall we?

  1. Put together a band
  2. Write some songs
  3. Go on tour
  4. Repeat steps 2-3 until
  5. Get noticed, get paid by micro label for distribution/help/etc.
  6. Write songs
  7. Go on tour
  8. Repeat 6-7 until larger label comes along and buys you out

However, looking above, considering the ease of digital distribution and the usefulness of the internet, it appears that the micro-label will reign supreme in the foreseeable future, the CD and big labels will wax away and die, and iTunes will collapse. Why?

Music should not be free. This is just a silly hippie pipe dream. Sure, artists should make money to play concerts and sell merchandise, but their music has value outside of being performed live (i.e. recorded). The issue is that the recording industry model has established a precedent for what the value of music is, and the paradigm has shifted to make it such that the recording industry no longer controls the value of music because they no longer have the exclusive hold on its distribution.

It is not that music is any less valuable in and of itself. It is more that there’s less need for someone to spend huge money trying to make music popular, which means there’s less expense to recoup, which means the savings can be passed on to the consumer.

Obviously these are gross exaggerations and generalizations, but there is a point to all of this. The industry is changing, and the big recording companies are scared, but they’re also too stupid to change, drunk on decades of fat profits that they see eroding before them.  Poor fatties.