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Tech companies hire PR firms to do their promotion. They don't give the PR firm a cut of all the revenues the company makes, nor do they give them equity necessarily (it does happen but its not the rule).

The 'labels' have no reason to exist, there is however a great market for Artist PR firms. We need that first disruptive one though, where an artist 'signs' with them meaning that they do the promotion but they don't own the music copyright. And as it is a new business model for the music industry it will take some time to work out.

Oh, definitely. But it's difficult to do something like that when the existing labels control access to radio stations, magazines, blogs, etc. Same goes for disrupting any industry, of course.

But don't the labels give seed money to invest in a band in exchange for equity which is similar to that for a tech company startup

In that sense, record labels are like VCs that also provide PR. For the amount of the investment that both labels and tech VCs make, its quite normal in our society to take an equity cut rather than a flat rate. Making the analogy to VCs also relates a lot better to the odds of failure, given that labels lose money on most of the bands they sign. And similarly to founders that don't know how to negotiate for good terms on their funding, many bands are also poor negotiators.

The labels don't really provide funding in the same way that VCs do; they essentially provide a very large payday loan. Any VC who demanded the kind of terms record labels do would be run out of the Valley.

The interesting question is, is there room for a real VC industry in music? I think there might be someday, but not in the current market — the existing cartel is so horribly messed up that they'd be pleased as punch to take you down with them.

People always say that, but what magic promotion sauce do labels provide that couldn't be provided much more cheaply by a less arrogant and power-grabbing entity?

Why wouldn't artists benefit from a promotion-only "label" that took a much smaller cut of their earnings?

> People always say that, but what magic promotion sauce do labels provide that couldn't be provided much more cheaply by a less arrogant and power-grabbing entity?

I share this sentiment. I certainly listen to plenty of music, but I've never been subjected to overt promotion from the labels. I don't listen to music on the radio and I don't watch much TV. Everything I learn about new bands comes from social networking sites and individual band blogs, Twitter accounts, Facebook pages, etc.

It's a bit of a pain right now to do that, and so the majority of people still depend on a label's endorsement to determine whether they're going to listen to a new band. But if someone were to consolidate those various functions into one service, they might stand a chance of unseating the labels, or at least grabbing a significant share of the market.

I don't listen to music on the radio and I don't watch much TV. Everything I learn about new bands comes from social networking sites and individual band blogs, Twitter accounts, Facebook pages, etc. It's a bit of a pain right now to do that, and so the majority of people still depend on a label

No, no, no, no.

If you don't watch TV and don't listen to the radio you are not the majority of people. Most of us are here discussing this topic because we are passionate about music. We are not the majority of people.

There is plenty of space for a niche site that lets bands promote themselves. But don't think that the majority of the population is just itching to get their hands on it, because they aren't.

> If you don't watch TV and don't listen to the radio you are not the majority of people.

You could have said the same thing in 2000 about social networking - if you don't share your photos and broadcast your thoughts over the internet, then you're not the majority of the people. But look at how things are now.

My point regarding how I discover and listen to music was to show that it's possible to do all that over the internet. That it's not outside the realm of possibility with respect to logistics and technology.

Don't look at what people are doing now, but what they could be doing in 5 or 10 years if you give them a valid reason for doing so. It's already been proven that people are willing to root their social interactions in websites and computers. There's no reason the same couldn't be done for music. It's just a fervent belief that the status quo is unalterable that stops these shifts from occurring.

Without a doubt, the degree to which the big music labels are entrenched will make such a shift damn near impossible. But as they say, the bigger they are, the harder they fall. Whoever is successful in cracking this egg will reap unimaginable rewards. Hopefully this will spur the kind of innovation that will lead to some breakthroughs in the near future.

Why wouldn't artists benefit from a promotion-only "label" that took a much smaller cut of their earnings?

They would. But they don't exist. The labels of today have a ton of existing contacts and influence with radio stations, magazines, blogs, etc.

A new promotion-only label just starting out would have none of that. In fact, there are already tons of "traditional" labels out there that are struggling to survive.

>I've long thought that MySpace might yet have a life as some sort of band-centric site. Since it died a horrible death nothing has really come up to replace it.

I don't know about that. I only really follow the UK electronic/urban music scene with any enthusiasm, but for what it's worth a lot of bands/performers use Twitter as their main point-of-contact, Facebook to post shows and releases, and Soundcloud for hosting online media.

But from a promotional point of view, that's awful. If you think about bands from a pure marketing perspective, they need somewhere to carve out a "brand identity" and a single point of contact with fans would surely be more useful.

And that branding is supposed to come from... MySpace? A lot of performers don't want anything to do with that site. It's like there's a stigma attached to having an active MySpace page.

Distributing across a number of services means they get everything they need, for free. And yeah, while some bands like the idea of having an "image" or branding associated with them, a lot don't.

Don't forget that for a lot of young people these days, this is how the world works. They don't expect a "proper" website for their favourite bands - they're already on Facebook, so they need a Facebook presence. They use Twitter all the time, so it makes sense they'd be there too. And Soundcloud is a great community for sharing homegrown music legally.

I'm kind of going off-topic here, but following the urban music scene has really brought into focus how irrelevant the modern commercial music industry is to a lot of its target market.

All of the above varies from genre to genre and location to location, obviously.

It's also a complex network of scouts, producers, and the like. Sure, plenty of bands produce and self-promote. Plenty of bands put their stuff on sites like bandcamp which (IIRC) give close-to-all the sales to the artists (with MP3 v0 and FLAC options for consumers). Amazon's MP3 store also has similar distribution (albeit at a higher cut for Amazon).

Distribution is solved (even when you throw stuff like iTunes, etc). But, you're not going to get top producers, recording studio sessions (which aren't cheap), and other things necessary for mastering a "high production value" album.

As popular as indie music and listening to Stephin Merritt sing over an 8-track is, popular music is usually heavily produced/mastered. These costs are simply outside the ability of most people.

Sure, you could say they should "bootstrap" it (to use a popular term amongst programmers) or seek "angel investors". But, look at how many programmers work for big companies.

I've seen a few bands here and there promote strictly on MySpace and SongCloud and do well. Word of mouth can be powerful. But, they almost ultimately sign up with a big label to get access to resources.

Several services tried to automate just that (artist selection, filter the "good" music), see:

http://en.wikipedia.org/wiki/Polyphonic_HMI and its followup http://www.musicxray.com/

I'm not sure if it's the right approach, but they're trying.