The Major Labels Are Not Reestablishing Their Dominance

Major Label Percentage Ownerships of (some) Streaming Services

The Misleading Statement

A couple weeks ago, Forbes ran an article detailing how the major record labels were taking their “revenge” on the current landscape by making “strategic partnerships” with music services to reestablish their dominance. This was a very bold statement. Here’s why it’s misleading, and essentially false.

What the major label industry really looks like; The Big Three

The Ironic Voodoo of Ignoring the Middle

As much as they would like to believe they still hold the power they once did, the major labels need to acknowledge that their ability to deem music as “good” or “sellable” is essentially irrelevant in the grand scheme now. It’s lost a certain sheen of relevance because they’re no longer the only deciding force out there to dictate the music the gets made or played. Now, the power of choice and reach comes to and from anyone with an internet hookup and a laptop. Ergo, though they may try to deny it, the major labels are gatekeepers no more.

The Punch: The Percentage Dynamics People Ignore

I wrote here why independent artists will eventually begin to move away from SoundCloud. What I didn’t focus on at the time, and precisely what the Forbes article glazed over, are the percentages of these streaming companies that are owned by the major labels. Beyond my argument regarding SC and Warner, the Forbes article noted that Warner owns 5% of SoundCloud, which it acquired in the streaming service’s latest funding round (and also which it acquired at about a 50% discount from what other investors paid).

Major Label Percentage Ownerships of (some) Streaming Services
  1. It proves that assertions of “equal opportunity” for independent artists on streaming services like Spotify and SoundCloud are basically false.

Why Warner Now Holds Leverage Over SoundCloud

With its 5% stake in SoundCloud, Warner will clearly attempt to steer the service’s vision and attention towards the the artists it represents, and whose interests it has at heart. Why would it not? That’s exactly what I would do. It’s not personal for Warner, it’s just business. But what it means for independent artists on SC is something much bigger: that they will no longer be the focus of the service, and again will need to contend themselves with scraps of attention after the major label(s) is (are) done feeding.

SoundCloud logo

Squeezing Models of the Past

Yet, easy though it may be for the major labels to dig into their deep pockets and purchase stakes in these streaming services hoping to once again gatekeep the music landscape, it is nonetheless not the same game they are used to playing. It’s now much easier for any music startup to get into the streaming or downloading service — and thus become a new source of distribution for artists. This means that the probability for the major labels to bottleneck and control the distribution channels is actually much smaller, particularly when it comes to artists and services that don’t focus on major label content, but rather independent dynamics.

Master Relationship Builder & Networking Consultant 🚀 | prev. CEO @glipple | Published @crunchbasenews, @Startup Grind, @Mattermark| Humorist & music addict

Master Relationship Builder & Networking Consultant 🚀 | prev. CEO @glipple | Published @crunchbasenews, @Startup Grind, @Mattermark| Humorist & music addict