No Label?

Matt Yglesias makes a good point about the Birdmonster story:

I have to think it would be odd to see tons of folks want to follow down this particular path over the long haul. Just because technological changes may make it easier to do publicity, marketing, distribution, etc. on a DIY basis doesn’t necessarily make doing things that way appealing or advisable. After all, there’s no particular reason to think people ready and able to produce music people want to hear are going to have enormous aptitude or inclination to do this other stuff once they’re in a position to get someone else to do it for them in exchange for money. That could be the case even if, in some sense, the numbers “don’t add up.” The simple added convenience of outsourcing functions outside one’s core areas of interest/competency has value. More likely, you’ll just see the nature of services that bands get in exchange for a chunk of their earnings will shift as the structure of the music industry shifts with it.

I think this is obviously right. Division of labor is a good thing. The guy who’s good at playing the guitar is probably not the same guy who’s good at writing press releases, booking shows, or handling media inquiries. Labels have traditionally handled those functions, and clearly there will be continued demand for people to do that.

But here’s the thing: it’s not obvious to me that a recording label is the best place to get those services. The labels’ comparative advantage in the 20th century was shipping little plastic (and before that vinyl) discs to record stores. They’re very good at that, but it’s a service whose value is rapidly diminishing. Yes, the labels also handled the promotional side of things, and some of them are quite good at that too. But they’re bureaucratic organizations with high overhead and a lot of inertia. In a rapidly changing music marketplace, it’s not obvious that the labels will be in the best position to keep up with the latest trends.

More importantly, when you sign with a label, you get a lot more than administrative and promotional support. You typically give the label the exclusive right to promote and distribute all of your musical output over the term of the contract, with them pocketing the vast majority of the revenues and having a significant amount of control over when and how you release new music. You don’t get to pick and choose the services you’d like to receive from the labels, and the costs of the unwanted services ultimately come out of your own pocket.

So yes, there will almost certainly continue to be label-like firms that provide support services to bands. But I don’t think they’ll look very much like the labels of the 20th Century. They’ll be leaner, more decentralized, and they’ll very clearly work for the bands, rather than the other way around. And I think that the old labels–with their high overhead and high-handed attitudes toward artists–will find the transition very painful.

SHARE: