In my first post I talked a little about the future of music and how music will be acquired in the future most likely through a utility based model. In the following posts after, I further explained the artist-fan relationship and tying in some DIY ethics. For this post, I would like to tie some of those lose ends together and talk about how record labels will most likely function in the future.

The record business is obviously on a steep decline due to millions of dollars lost per year due to illegal downloading. In the midst of this, everyone is trying to find a logical answer and a way to still make money while selling music. Indie labels control about 25% of the market, while the remaining 75% are major labels. There has been great loss on both sides (indies and major labels), but the infamous major labels have taken the hardest hit of all.

The reason I say infamous is because major labels have always had a poor reputation due to the fact that if you aren’t making money for them (i.e. moving units off of shelves= selling CDS), they pretty much won’t give you the time of day. This has resulted in many artist’s failed careers and the many reasons why everyone loves to hate major labels. Your career can start as fast as it can end in the major label industry, so signing with a major label anytime soon would be a terrible idea. Major label success is practically one in a million.

Looking towards the future, labels will most likely be focused around management. This model is often referred to as the New Century Business Model. I won’t go into too much detail about management, but managers handle artist’s careers, finances, and instruct artists on making good career decisions. This management core will also include: a record label, publishing company, merchandise company, touring company and various other entities combined into one. One company for example who is already doing this goes by the name of Nettwerk (www.nettwerk.com). They manage the likes of Brand New and also have Matt and Kim on their record label. To put something together such as this would take a great deal of work and a lot of knowledge/connections in the industry. The logistics of how these management labels are run vary from company to company, but this is the basis for the structure of the New Century Business Model.

In the future, you will see more companies such as this start to surface. We are only at the beginning of a new era in the record industry. So be prepared to witness massive changes in the future.

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