Hank Williams wrote a great post this morning about the haves and have nots of the music biz, which touched on a comparison between record labels an venture capitalists. This obviously struck a posting nerve and caused me to write a blog post in his comments (sorry) so I thought I might as well re-post it here.
The comparison between the labels and VCs is something that has struck me before - it's a very apt one. One big difference is that labels come with a whole package of other services too - promotion, distribution etc, and artists give up far more control over their destiny than a VC funded startup would.
It could be that artists would be better served if it was possible for them to shop around for each of these services - funding, promotion, distribution - and remain more in control of their destiny.
This is all going to be moot if everything digitally reproducible is expected to be given away for free. Artists with anything more than the most basic of ambitions would be forced to revert to the business model that existed before the record label. I think it was called patronage.
You can argue that the label model was a funding model that only worked because of the combination of distributability+scarcity introduced by the vinyl record. But that funding model gave us Dark Side Of The Moon/Songs In The Key Of Life/What's Going On* and we will all be poorer if that goes away.
(*I list those three because they all cost a lot of money to make - you cannot make records like those in your bedroom)