Label 2.0? Now's the time....

"Suddenly, labels are not only struggling against nosediving CD sales.  They are also facing a powerful class of emerging startups, a sector that is just taking shape.

But where are the billion-dollar, label-replacing ideas, tailored for modern, digitized consumption habits?  The digital music space is already bubbling with innumerable startups and fresh ideas, but who will develop, market, distribute, and license artists in the future?"

~ Digital Music News

Sometimes it feels like Silicon Valley circa 1999.  Music-based companies with the faintest whiff of an idea are snapping up funding quicker than you can say “lala.com”.  Innovation is great, and the spirit of opportunity and entrepreneurship such an atmosphere engenders is great for music in general.

My question is:  Do we really need to reinvent the wheel here?  According to the hype surrounding Napster, digital music was the death of the music industry.  Yet here we are in 2007 and it’s widely accepted that there is, in fact, a more voracious appetite than ever for recorded and live music.

So amongst all of the great ideas (lala.com, last.fm, SnoCap’s MyStore) I think an overarching problem has been missed.  Once the traditional record label dies, who and what will take their place?  

I watched with interest last week when Nettwerk, Beggars Group, Matador Records, Om Records, XL Recordings, IODA, IRIS, INgrooves, Redeye Distribution, and the Orchard opened up their respective (predominantly Indie, wholly DRM-free) catalogs to Imeem/Snocap’s ad supported music sharing plan.  

Not only is the size of this venture impressive (at almost 3 million tracks) but the brain-trust behind these respective labels and distributors is representative of many of the best minds the new music industry has to offer.  I’m not one to follow the latest trends, but when all of these companies see value in an idea, there has to be at least some merit in it.  

What was most fascinating though, was the fact that at the same time Warner Music Group is suing Imeem for copyright infringement.  

I mean, WMG are seriously missing something here, right?  It’s these kinds of studies in contrast that seem to point to an upcoming vaccum as larger, protectionist labels begin to lose market share steadily and quickly. 

Although the institution of the record label is certainly unfashionable, the basic function of a label is still to develop, market, license and distribute artists.  Yes, every artist now has the ability to handle each of these essential functions themselves, but which artists are actually capable of doing so?

A label is primarily a company which assists in the execution of these functions while an artist concentrates on the task at hand: being creative.  Among all of the hysteria surrounding Digital Music, music industry bashing and nose-bleed funding rounds, the services a label provides to an artist – 60 years ago and today – remain relevant and essential to the ultimate goal:  Creating art and having it experienced.

Over the next few posts I’ll be examining what modifications to the traditional model need to be made to make a Label 2.0. and whether it'll all make any difference in the end...I really hope you’ll join the discussion…

Update:  Shortly after I wrote this, Warner dropped their suit and signed up with Imeem.  

For more thoughts on Label 2.0, check out Digital Music News' recent article on the subject.