The Marlowsphere Blog ( #111)
There are two kinds of record labels in the world today: the majors (of which there are only three) and the small, independent (or indie) labels, of which there are thousands globally.
These are the three remaining “major” record labels (since 2012):
- Universal Music Group (part of EMI’s recorded music division absorbed into UMG)
- Sony Music Entertainment (EMI Music Publishing absorbed into Sony/ATV Music Publishing)
- Warner Music Group (EMI’s Parlophone and EMI/Virgin Classics labels absorbed into WMG on 1 July 2013)
The consolidation in the music industry—which is now global in terms of distribution—parallels similar mergers in the oil, accounting, and media industries. For example, Exxon bought Mobil and is now Exxon/Mobil, the largest oil company in the world. There used to be eight big accounting firms, now there are four. There used to be 80 media companies, now there are six with their fingers in all sorts of print, electronic, and live entertainment activities.
Perhaps we should not be surprised. Mergers & Acquisitions have become prevalent in the last several decades in numerous industries as the wave of electronic media has become a communications tsunami of sorts. From a management perspective, the growth of electronic media has provided managers with a greater span of control, thereby enabling consolidation across the board.
But every action has an equal and opposite reaction. In the context of this blog it is the growth of independent music labels despite the apparent domination of the big three music labels.
The growing power of the indie music industry was profiled in a New York Post article earlier this year. In part, the reporter, Claire Atkinson wrote in January 2014:
“The rise of streaming music services, where the major labels’ control is weaker, and the decline of FM radio, where the labels’ control is powerful, has had a clear effect on the power of indie.
In 2007, indies controlled 25.8 percent of the music business, No. 2 behind Universal Music Group’s 28.8 percent share. By June 30, 2013, indie — a universe that includes Taylor Swift, Jason Aldean, Bon Iver and Mumford & Sons — leapfrogged Universal by growing its market share to 34.5 percent, according to Nielsen SoundScan. Universal was at 28.3 percent.”
The growing influence of the so-called “indies” was articulated by Peter Weber, a senior editor at TheWeek.com, who wrote (also in January 2014):
In the first half of [2013] alone, people listened to 50 billion songs on streaming services, like Spotify and Pandora, or on YouTube, according to Nielsen SoundScan. That’s a 24 percent increase over the first half of 2012.
Revenues from streaming services are also increasing: Record labels and musicians got $1.1 billion from ad-supported and subscription streaming in 2012, a 40 percent jump over 2011. That’s still a fraction of the $28.7 billion the global music industry pulled in in 2012, but as Hannah Karp at The Wall Street Journal notes that money will only grow as an explosion of new streaming services hits this year.
The American Association of Independent Music (A2IM) helps independent music labels improve business by promoting access and parity through advocacy, education and connection-building with one another and affiliated businesses.
According to their web site: A2IM serves the independent music community that, according to Billboard Magazine, comprises over 34.5% of the music industry’s market share in the United States (and approximately 40% of SoundScan digital album sales).
Here are six reasons, then, why you should support an independent label:
1. Independent labels look to at least cover their costs, turn a modest profit, and market a product to as wide a niche market as possible. The major labels market in as many ways as 
possible to dominate the music industry—they care about making as much money as possible given the investment they make in new and extant artists.
2. Independent labels, given the smaller, niche markets they serve, reach for a higher intellectual and aesthetic level. The major labels reach for the lowest common musical
denominator.
3. Independent labels take chances/risks out of which comes experimentation which, in turn, leads to innovation. Very often, though, innovation occurs by accident. The major
labels want guarantees of success. This attitude breeds musical conservatism.
4. Independent labels support musical self-expression that allows for new ideas and sounds to be shared.
5. Small, independent labels allow artists greater freedom of creative expression.
6. The small labels are where larger movements come from. Smallness has a major role to play in growing fresh musical expression. Many a large industry grew out of someone’s
garage. The airline and home computer industries are two that come to mind almost immediately.
The small labels are where larger movements come from. Smallness has a major role to play in growing fresh musical expression. Many a large industry grew out of someone’s garage. The airline and home computer industries are two that come to mind almost immediately.
Overall, while the big three music labels create the perception that they are the only game town—with their promotion of rap, hip-hop, rock and pop; and if you buy the myopic public coverage of the Grammys—the larger universe is the growing presence of so-called independent labels, helped along by the expanding digital universe.
The irony is that in the last 100 years success in the music business has evolved from live performance 
(prior to recordings) to recorded performance (78s, 45s, LPs, CDs) back to live performance (Live Nation didn’t become a monster company for nothing). There was a time when Barbra Streisand was just a recording artist, but in recent years she has come of the recording booth to perform live again. Today, a recording for a very few makes money, but it is the live performance where the fans are created, the venue and performers make money, and physical CDs are sold.
Recording has also evolved. Early on an artist recorded one piece, given the technological limitations at the time. The LP enabled the recording of a multi-track album. And in the digital age, musicians, for various reasons, have gravitated to single track releases again.
What goes around, comes around.
If you have any questions or comments about this or any other of my blogs, please write to me at meiienterprises@aol.com.
Eugene Marlow, Ph.D.
November 10, 2014
© Eugene Marlow 2014