I have very little acumen for business or music but, if I did, I’d be seriously thinking about starting a company that provides all the services for musicians that major labels do except manufacture and distribution of the final product. That is, this company would be employed by musicians to provide studio time, image management, promotion and tour coordination. The musician would be on her own to find a distribution outlet for their music (though, naturally, would owe the new company a cut of sales). If you were the first company set up this way, you stand to gain a significant portion of the world’s musicians as clients within two to five years, though probably not some of the very biggest musicians.
The reason this would work is Apple and iTunes. Large record companies have serious problems with Apple’s success. Some of them complain and threaten to stop providing their artists music to Apple. Some, like Sony, refused to do so in the first place. It seems likely, though, that the large media companies are playing a waiting game until current iTunes contracts expire in 2006. Meanwhile, artists prevented by their corporate overlords from making their existing music available on iTunes are getting antsy and are creating new material specifically for iTunes and iTunes only. Others are releasing entire albums via bittorrent.
Big media companies have shown a determined, nearly pathalogical, desire to maintain their bloated empires by any means necessary. There is no reason to expect they will suddenly become enlightened to the new possibilities of technology, but will, instead, try to sandbag Apple at the expense of both their artists and the music-appreciating public. This will provide a great deal of incentive for artists to ditch their labels. Some will strike out on their own. Most, however, will probably hold onto the “big label” idea, in spite of its drawbacks, because Apple and iTunes alone doesn’t provide them with everything they need to become superstars.
This is where this new company fits in. It enables musicians to embrace iTunes without losing the promotion and other machinery they need. It will completely eliminate any incentive that musicians might have to stay with a big label. The key to this is that, once it becomes clear what is happening, at least one and probably most of the big labels may eventually be forced into retooling to work like this as well. If that happens, it won’t happen quickly. Still, to be successful, this new company needs to strike very quickly, as widely as possible. Preferably, it would start now, before big media kills their iTunes deals. The company also needs to use the agility provided by its small size in ways the media giants can’t.
If you attempt to build such a company, best of luck to you. And invite me into the IPO.