Among certain observers, it has become fashionable to contrast the “old model” and the “new model” of the music industry. This conjures up images of a dystopian analog past where the business was run by a bunch of cigar-smoking execs & predatory middlemen out to screw artists, and a utopian digital future where a leveled playing field will allow for artists and fans to join together in group sing-alongs while music flows like water.

It’s not as if there isn’t an element of truth here — digital technology has indeed allowed for easy access to mass-scale distribution channels that musicians use every single day. But overall, this framing obscures as much as it reveals. To begin with, there was never one model of the recorded music business. An examination of musical history reveals that artists and labels are hardly monolithic and have always been diverse in their goals, ambitions and scope of operations.   

While major labels have long aimed to dominate the pop charts and achieve critical cultural mass, independent labels have often chosen smaller-scale models that elevate diverse regional sounds. As Rick Kennedy and Randy McNutt write in their invaluable history, Small Labels: Big Sound:

From the 1920s through the 1960s, scores of small, independently owned record labels featured distinctly American music: jazz, blues, gospel, country, rhythm & blues (R&B) and its offspring.  Operated by individuals or families, these labels fostered America’s musical voice over five decades with original music on the tide of social change and became influential and enduring.

In the 1940s, Mo Asch, founder of Folkways Recordings, railed against the major labels’ emphasis on following trends and fashions in pursuit of hits, and worked to document folk traditions, particularly the voices of working people who would otherwise not be heard. Private press recordings were another option (for those who could afford it, or could raise capital in other ways — in gospel music, for example, it was not uncommon for local congregations to “crowdfund” recordings). In the eighties and nineties, the growing independent music movement further democratized the means of production, and posited that if commercial radio and MTV shut you out, you could collaboratively build alternative networks for promotion and distribution, like fanzines, direct mailorder, college radio. It was far from perfect, but it was a step toward creating a more diverse cultural ecosystem and opening up access to different kinds of voices.

These alternative networks were frequently built with goals and assumptions about scale that differed quite radically from the majors. On a major label, an artist gunning for big-time chart success would typically be given a sizeable advance to make a record. If the record recouped costs (which was notoriously difficult even for superstar artists), they would ultimately earn a small percentage of sales, to be made up in volume. By contrast, on an indie label, an artist would typically make a larger cut of a smaller pie. Indie releases were expected to sell fewer copies, but lower overhead and a smaller advance made it easier for an indie release to recoup earlier, and a 50/50 royalty split (a gold-standard for artist-friendly deals in the indie world) meant that an indie artist could earn as much from a low sales figure as a major label artist could earn from an exponentially higher sales figure. Many of these labels were run by artists themselves, so they had a special commitment to treating artists fairly; some aimed to recoup on every release. Others also worked to treat music consumers fairly by keeping prices low.

At the same time, if she had the capital up-front and the distribution and promotional infrastructure in place, an artist could even self-release her record and make even more per unit. “Direct to fan” models have been part of the music industry since long before the phrase became a buzzword.

Likewise, there’s no “new model” today. Instead there’s a whole range of different models. There are artists whose careers are built on crowd-funding and social-media immersion, and covering popular hits on YouTube, while for other artists, such moves might feel awkward or pandering. There are artists who give away all their music for free in hopes of gaining the largest audience possible. There are artists and labels that withhold their catalog from digital services and successfully stick to scarce-goods, selling limited edition vinyl in small runs directly through their websites. And there are many more approaches in between.

The binary “old-business/new-business” paradigm also glosses over that many of the most important and impactful changes to the music business in the past few decades happened before the digital transition. With media ownership consolidation, many diverse regional scenes and economies largely went underground or died out. The growth of big-box retail impacted mom & pop record shops and narrowed distribution channels for artists whose career paths weren’t built on mass-audience assumptions. These structural changes haven’t completely abated, and the power of the internet cannot completely bypass them.

The contribution of the independent music movement is that it encouraged the growth of a diverse ecosystem, allowing voices that could speak to a broad variety of niches, a step towards a culture representing the full diversity of America. The rise of online culture, it was hoped, would facilitate more of this by facilitating more direct connections to fans and making commerce and discovery easier. And to some extent, it has.  In contrast, one of the ways that major labels have managed the transition is by moving the opposite direction; shrinking their active rosters; abandoning “niche” artists and elevating superstars. “360 degree deals,” where the label can get a chunk of live revenue, branding & ad dollars, merchandise, etc, have become ever more common. 

Still, commenters frequently describe the commercially dominant business model as if it was the only one. Salon, for example, recently ran a piece which was so committed to the notion of a “perennial business model of the music industry” that it bizarrely described Ani DiFranco’s Righteous Babe Records as “a miniature version of a major label.” This is sort of like calling your neighborhood’s local organic family-owned cafe a miniature version of McDonalds. It’s true on some level (both restaurants would give you food in exchange for money), but it misses the entire point.

And of course, when you lack any nuanced understanding of how the practices of smaller independent labels and self-released artists differ from the majors, it’s impossible to really consider how larger industry changes impact them. An accurate and comprehensive understanding of the diversity of models presently and historically should be a prerequisite for understanding what’s wrong with the music business and how to improve it.