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September 06, 2006

Two Music Heavyweights Weigh In: Record Labels Have Lost Monopoly

Bill Bragg writes about the recent controversy on MySpace and MTV's Flux networks, among others, that are trying (or have tried and failed) to gain copyright and commercial control of any content uploaded by users or artists. While that's an important battle to win, maintaining artists' rights to their own creative content, Bragg succinctly sums up the diminishing role of the record labels.


  Monopoly! 
  Originally uploaded by Jebb Graff.

Now that physical production and distribution are no longer necessary, the question arises as to whether new artists need to sign their rights away to record companies at all. A band which records and promotes its own music via the internet could sign a deal directly with iTunes, keeping all of the profits and retaining ownership of copyright.

Although the task of breaking an artist should not be underestimated, the financial incentives are so great that it can surely be only a matter of time before the first truly independent artist breaks through via the internet without relying on a record company to market them.

Again, I'm not saying that the record labels are dead; that's a catchy bumper sticker but overall an  oversimplification. In the future, the record labels' role will be in solely discovering new artists and helping with marketing and advertising, but their traditional roles of middle-men and in product distribution will disappear over time.

Bob Lefsetz responds to the MySpace record news (as I was hoping) and echoes Bragg's distaste of the music industry and foretells its future in a world where shelf space is unlimited and distribution costs are zero ( less blockbusters + unlimited, niche mass-markets = The Long Tail ). Emphasis added:

Please, please, please, let us state now and for all time, the hardest thing to do in the music sphere is find good talent.  Just about all bands suck.  Ask the major labels, what’s their hit ratio, a zillion to one?  AND, with their deep pockets, they get to take the cream off the top.

But the reason they’ve been able to cull the cream is because of distribution.  The majors controlled distribution.  What if they didn’t?

THAT’S what the Snocap/MySpace announcement signals.  The death of the major label monopoly over distribution.  And without control of distribution, you’re just another player in the marketplace, with much less leverage.  This is the labels’ greatest fear, and now it’s come to fruition.  THIS is why they’ve been fighting P2P all these years, not because they hate people stealing their wares, but they’re fearful of independents stealing their BUSINESS!

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