Here’s a short coda.
I wrote previously about independent labels as a growing source of successful new music and the Majors as a declining developer of in-house talent, possibly leading to a stronger licensing role for the latter, Adele being just one example.
Although this seems advantageous for all parties there are legacy problems to deal with. I mentioned the eye-watering pay cheques of Major label managers and their yearning for big margin in-house successes.
There is also the changing role of online retail. While the Majors still have a strong territorial role distributing physical recordings they will be much less important in future as sales move onto the web.
Then there’s online entertainment. Today, the Majors are significant gatekeepers to traditional broadcasting and offer a useful service for licensed material (such as Adele) but that role will be diluted by the growth of new channels.
So, as time goes by independent labels won’t need to license their big successes to Major labels quite as much.
Finally there’s the whole question of the master license. Major labels own the master licenses for all their artists but they aren’t necessarily the best agent to work every aspect of a master these days. And there is a real question about value-for-money when they take half or more of the master income for transactions in which their ownership seems incidental. For example, say Rihanna has an album with Mercury who provide access to distribution and broadcasting, should they also take a big chunk if one of the tracks is used over the credits on a film? Your attitude probably depends on how you see the artist—as someone working for a label or someone with a label working for them.
Today, when anyone can make a sound or video recording, ownership of the master is a very blunt tool for simply getting the product to market or the media. I would argue this is another reason why closer partnerships between artists and independent labels are better all round.
The Majors would probably argue it’s only by owning all their artists’ masters that they can negotiate strongly with new licensees such as Spotify. But who benefits when such deals are struck? Do the Majors look after their artists’ interests or their own?
There are similar questions hanging over 360° recording contracts. The Majors certainly offer a number of very strong services to their artists but they are by no means the strongest in every sector.
From my perspective this makes the licensing solution sound even more attractive. An independent label seems far better able to tailor a number of licenses with different service suppliers rather than lumping the whole thing with a Major. But obviously not everyone will see it the same way.