Ok, so, this might seem like a basic question but what is a label anyway?
Ian thinks it's a music service organization oriented towards market niches:
With the disappearance of advantaged label competencies such as superior production, distribution, and marketing, reconfigure your labels to be based around affinities and focused narrowly enough to serve roughly the same audiences from release to release. The labels would be very small teams responsible for fan cultivation, focused and direct marketing, and A&R. They would rely on EMI for service, support, and tools (generic marketing would happen on the EMI mothership, for example).
That's sounds an awful lot like a marketing company to me. And if that's the case, Victor isn't down with it:
as far a I know no major label have ever, as in never, broken a band. The band breaks itself, proves it has an audience, and then the labels cash in and sucks the artists’ till dry. There is zero expertise there.
The thing that I get hung up on is that the music business doesn't have a lot of empty niches, and I don't see what a label brings to the table in any of the niches it doesn't already occupy. Sure, labels can get into the concert business, but why are they better at it than established players? They'll be coming to the party with culture and resources designed for a completely different line of business.
Every other significant revenue source in the music industry is a complementary product to recording sales. As far as concert promoters and merch vendors are concerned, every CD should be 100% free. Having to sell the CDs just gets in the way of creating the attention that moves t-shirts and concert tickets. So how does a label get into these businesses if its legacy interest in selling recordings interferes with its new interesting in giving recordings away?
The business of a record label is selling records, and if selling records isn't the point then labels seem to be the wrong kind of business to drive the music industry. That's not to say that there won't be label-ish things in the long run, just that the labels seem to be the worst candidates to fill that slot. And what slot is that?
Bands need to cluster
If I were writing a business plan, investing money or advising investors, I would say - stay away from stand-alone artists and invest in groups/collectives/labels/consortiums/franchises, but not stand-alone artists or bands.
Stand-alone artists are not, and can barely be entertaining on the Internet. Clusters of artists can. The person that can figure out the “model” - how to cluster artists and make it all work, will be creating a real business.
Well, I agree with you...we were lucky with World-Around Records, though. I look back at the past year of our operation, and it was mostly formalizing informal networks that grew organically and mostly by accident.
Taking this back to the long running theme on this blog about musician sites and musician blogs, the success of standalone musician blogs depends on becoming part of a network.
A complementary point from a blog post on newmusicstrategies.com titled Do I really have to blog?
The idea that the world is divided into content creators and consumers is increasingly redundant. What’s important is the quality, frequency and ‘engageability’ of your content - and that’s no longer restricted to your musical output.
The fact that you make music is unremarkable. The quality of your communication — musical content included — is now the measure by which you will be judged. This is not a call to pick over the mundane minutiae of your life. This is a challenge to be interesting.
And really, this is not such a radical or transformative idea. Your music has always been communication. Your music business has always been a communication business. This is about using the online tools to enhance that communication.
But blogs can easily be isolating experiences, and that's a core problem for musician-bloggers, who need to keep up a steady stream of releases but have to stay connected to a vital cluster of fans and other musicians. Hence the reason why most musicians thriving on the net pick a social publishing context like YouTube, Myspace, CCMixter, or GYBO.
Mo bettah, Mr. Hands
Clustering is something labels are already doing. Blue Note is for jazz. Warp is for a particular kind of electronica. Matador, Sub Pop, Metal Blade...
Which brings me back to Ian's proposal to Guy Hands:
reconfigure your labels to be based around affinities and focused narrowly enough to serve roughly the same audiences from release to release. I'll buy that this is an important thing to do, and the need is not going away. But I'm still skeptical that record companies can cannibalize their current business to do the right thing in this new niche, and in the meantime YouTube, Myspace, CC Mixter, and GYBO are doing fine without them.
So here's my proposal to Guy Hands as to what he should do with EMI's new music business.
Creative Commons has posted a Request for Proposals (RFP) regarding the future of the ccMixter.org site, and Victor has posted detailed comments on this. If I were EMI I would step in to operate CC Mixter. It's a fully functional cluster of music makers with a strong hold on its niche. I don't know how to monetize it at the scale EMI would need, but I do know that at least EMI would be in the game. Take over and learn how it works. Use the time to gain the institutional skills in managing community. This will take a while, but in a few years the Mixter community will have started to reverse colonize your company. And that's EMI needs -- to absorb the values and skills needed to manage clusters.