An obituary for the major labels

Update, 3/24: An SXSW organizer contacted me to let me know that the show included 14 panelists from major labels, as well as 20 panelists from independent labels. The truth remains that I didn't see, hear, or meet any--but of course I couldn't attend every panel. I've corrected the post accordingly.

Almost a year ago, I posted about how two executives from major Web companies had taken new positions related to digital music: Douglas Merrill left Google to become EMI's president of digital operations, and Ian Rogers left Yahoo Music to become the CEO of Topspin, a then-new company specializing in direct-to-fan marketing.

A year later, Merrill's gone, following Guy Hands out the door. (Hands was the CEO of private-equity firm Terra Firma, which bought EMI in 2007.) I'm not sure what he did there, but imagine he was behind the portal site that EMI launched last year...to no effect whatsoever.

Contrast that with Topspin, which oversaw successful launches of several albums and was just at SXSW to announce a major update to its automated marketing platform.

Sure, EMI's taking in far more revenue than Topspin--it's still got The Beatles' catalog, after all, and Topspin's just a start-up--but look at the momentum, the level of excitement, the bottom line. There's no comparison.

At SXSW, the conventional wisdom from every panel I attended, every business meeting I had, and every artist and fan I spoke with, was that the major labels are technological dinosaurs with no chance of survival. I didn't meet a single major label employee in the entire four days I was there, though at the Guitar Hero-Metallica event, the PR coordinator spent a long time explaining to a TV crew that all interview requests had to be approved by the band's label. Ah, the good old major labels we know and love--barriers, not enablers.

(Aside: as much as Metallica may represent the old record industry, its SXSW set absolutely slayed, consisting almost exclusively of pre-Black Album material, and so fast and tight and loud and awesome in the original sense of the word that it seemed like it--and we--were all 17 again. Pitchfork's take is absolutely right; it's not fair to compare them with any of the other bands at SXSW. Long may they rock, with or without the recording industry as we know it.)

I'm rambling, but keep looking. U2's second-week sales dropped 75 percent--nobody cares. Sony hired Rick Rubin to come up with a digital strategy, but nothing's happening (although Rubin remains a successful producer).

The RIAA seems to serve no purpose except to sue customers and try to get damages that are many thousands of times the value of the product infringed. Warner CEO Edgar Bronfman Jr. took home a $3 million bonus after his company lost $35 million and earned his spot on the CEO wall of shame.

Established artists are going independent as soon as their contracts expire--the latest is Counting Crows--and reporting, again and again, how much better they can do without a label.

A year ago, there were still some arguments for the necessity of major labels to handle marketing, promotion, and other tasks. Not anymore. The conventional wisdom now: if you're interested in the music business, and you want to change the world and make lots of money, go anywhere else.

If you're a musician, and you want your music to be heard, go anywhere else. If you're an investor looking for a business with a lot of upside, go anywhere else.

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