From inrainbows.com
Oasis, Madonna, Nine Inch Nails, Radiohead, Jamiroquai – the list of artists leaving major record labels continues to grow, and the current crop represents some of the biggest hit makers of the late 90s’. Is this a sign that the record industry business model is no longer workable? Or just a matter of corporate downsizing to make way for new talent?

In the past when artists left their record labels to go independent, it meant either their career was in serious decline or their name was formerly or currently Prince. At first look, Oasis and Jamiroquai might seem to fall in the former category; both haven’t had a stateside hit in years. But all the recent artist defections, especially Madonna who is leaving Warner Brothers for a 120$ million dollar deal with concert promoter Live Nation Inc, reflect a fundamental changes in the music industry.

With compact disc sales falling every year, these new indie artists are going where the money is- concerts, the Internet, and licensing deals. In the Madonna deal, Cd releases are little more than promotion for her concert tours – the last Madonna tour grossed over 200$ million. Radiohead posted their new album for free on their website and saw on-line merchandise sales skyrocket. A catalog of gen-x hits keeps Oasis, NIN, and Jamiroquai making big money through commercials and movie soundtracks.

The little secret of the music industry is that in the late 90’s, advances in home recording technology turned the labels from music makers into music distributors and promoters.
Now that Internet distribution is viable, bands with name recognition and a good publicist see the big labels as superfluous.

While these established artists might think they no longer need the big labels, the feeling is likely mutual. The major record labels have all but abandoned cultivating critically acclaimed artists in favor of quick single-download sales from new acts. With online single sales out pacing CDs, labels have little incentive to invest in groups like Radiohead who are known more for fully realized CDs than pop hits.

The music industry has grown too large and interwoven with other media companies to be in danger of completely folding. But the defection of well-known artists from the golden age of CD sales shows that every aspect of the music industry is in flux.