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Are Indies Doing the Dirty Work for Major Labels?

guitarcaseIt seems like the dawn of a bold new era for the music industry, especially if you’re an indie artist. Major labels are going down, and indies are on the rise, right? It sounds nice, but an article posted today by Fortune (which can be found these days on CNNmoney.com) claims that the indie boom is, in fact, the single greatest thing ever to happen to the majors. Why? Because all the money, and all the talent, is still flowing up.

Here’s How It Works:

For the last decade, major labels haven’t had the cash they once did to promote artists, which means 3 things:

  • Fewer artists are being signed.
  • Less marketing heft is being put behind musicians that do get signed.
  • Bands that aren’t successful after the first single are dropped. Fast.

It seems like a self-perpetuating cycle, doesn’t it? And predictably, this throwaway model isn’t what makes successful music careers. But thanks to the efforts of independent artists, major labels have found a new source of free labor, and a natural selection process that helps them determine who to bet on.

The Investment Pyramid

In 2010, the average band is launching its own career. Most artists are investing their own money in the production of their first album, as well as their first tour. They’re also pouring hours into self-promotion online and through social networking. And since thousands of bands are going through an identical process, the ones who achieve significant notoriety are obvious bets for investors, particularly since the initial cash hemorrhage and legwork are taken care of.

Now it’s time for an indie label to step in. “Indie” meaning labels that are—by and large—in bed with a major music company. The deal between indie labels and their major label backer is simple. The indie puts the effort in to cultivate and nurture the crème de la crème of independent bands, and if they explode into stardom, then, and only then, will the parent company dip in, offer its resources to the rising artist, and take its cut.

In this way, the few select mega-superstars are born, and major labels, rather than suffering from the growth of the indie industry, end up benefiting by having the selection process done for them. No financial risks required.

“Key Weapons”

Unfortunately, this model is made possible by the fact that producing and distributing music independently (and usually, online) is still not earning anyone a lot of money. According to Mina KimesFortune article,

“Of the 63 new releases that sold more than 250,000 copies last year, 61 were issued by major music companies.”

Not surprisingly, this figure leaves the 100,000+ albums released online last year in a losing numbers game. Self-producing indies aren’t making a lot of money, which means they jump at the chance to get on a label, and in the end, any serious success is mediated by, and goes into the pockets of, the likes of Sony and Warner Bros.

In her article, Kimes concludes by speculating on a future in which the industry is dominated by just a couple of huge music companies, who use small labels as “a key weapon.” I can only assume that, in turn, those small labels will be using the investments of indie artists as their own arsenal, waiting until a solid fan base has already been developed before dangling the promise of actual income in front of a starving artist’s nose.

The Indie Paradox

It sounds almost Orwellian, doesn’t it? And unfortunately, this model will continue to prevail as the industry norm so long as musicians continue to jump at the chance to finally get out of the indie grind and onto a label.

And who wouldn’t jump at that chance? It seems that indie bands are stuck in a perfect paradox. Reject label support, and someone else will step up to take your place. Accept the system, and it will always be the only way to achieve a truly financially successful career as a musician.

Or is there an alternative? Is there some way for independent artists to turn fans and listeners into paying customers without the help of major labels and their distribution channels and cross-media connections? The solution may well be to build an alternative industry, made up not only of bands and musicians, but of managers, producers, designers, and other independent technical professionals, supporting and working with each other outside the influential spheres of big music companies.

Is it possible to create an industry of independents so strong that label offers and 360 contracts begin to seem greedy and weak? Tell me what you think, Buzz readers!

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  1. Alternative industry. 360 deals already suck. It is really up to the fans to support the alternative industry. Luckily, a lot of the fans are your photographers, writers, and etc, so its actually going to be a bigger collage of work going on.
  2. This will be the case until revenue from digital music is >80% of the total. As long as the majority still comes from plastic disks, the majors will hang on to this model.