The Death of the Record Label Industry

I imagine if blogging was around back in 1999 (were they?), there would have been a few posts with the exact title of this one. They would have surfaced very soon after Napster unveiled itself on an unsuspecting public. Napster would have rocketed throughout the blogosphere being proclaimed as a 'revolutionary service heralding the end of the music industry as we know it'. Record industry types would have scoffed at the suggestion, and gone back to their powdery white mirrors.

Fast forward to 2007 and those record industry types would still be in the same situation they are in today, so i guess the moral of the story is: technological change is inevitable.

Record labels are in a quandary right now. It was one of the first highly visible industries to feel the effects of that killer disruptive technology, digitalisation, and it continues to feel those effects today. File sharing and peer to peer continue to run riot, and now bands, just like consumers, are more empowered than ever, and have the ability to distribute their music and market themselves globally, without the need for a record label. I believe the options are now so comprehensive, that in a couple of years time, the record label industry as we know it will cease to exist.

I'm so confident of this, i have even started a countdown to the death of the record label industry as we know it. See below:

I have also placed it in the bottom right hand corner of my website, in my widget panel, where it shall stay until such day as i am proven wrong.

So why do i think it will die a humble death then?

In general terms, i believe that web 2.0 is empowering bands or music groups to distribute their music and market themselves like never before. To be more specific, i feel applications like Indiestore and Blastmymusic (please add more into the comments below if you know of others, these are just the two i've found with my limited research budget ;) ) that enable a band, and their fans, to sell music via their website, myspace or blog, will empower bands like never before to distribute music across the internet and keep the lions share of the money for themselves.

Both these services offer a widget which makes it very easy for anyone with limited knowledge of html to insert a promotional store onto their website. This means a band can sell their music via their own website, and a band's fans can do the same. This creates an army of loyal sales agents for each band, expanding their reach. There are numerous other 'outlets' bands can sell their music through as well, Itunes of course being one, and another outlet will be via Myspace itself, who have announced recently they will allow unsigned bands to sell music via their myspace pages. With 106 million users, myspace will certainly challenge the dominance of Itunes.

Marketing will be easy. Bands have Youtube, where recently one band, OkGo, has won an award for their music video which has been seen over 14 million times. Myspace is a double whammy in that its a great place to market music and soon it will be a great place to sell it. Radio DJs in the future will become more like editors and choose what music they play, rather than pandering to the record labels. And music discovery services like Pandora, charts and social music services will aid in the exposure process.

So where do record labels fit in that process? They don't. If you're a new band right now, you could make it without them. But lets give the record labels a few years while they cling for dear life. My prediction is for early 2009, the record label industry will be dead.