The latest issue of the Economist has an
article discussing the current (woeful) state of the Recording Industry. Sales of physical formats are down, of course, but even digital sales are not seeing the growth that record labels crave.
The Economist article discusses a couple strategies currently in use by record labels, such as digital deals for the development of "Comes With Music" devices. Labels also seem to be employing "360-degree" deals, in which the companies can share in the artists' earnings in other areas of music consumption, such as touring and merchandising.
Both strategies suggest a new focus on the roles of non-label businesses in creating vehicles for music delivery. The implications of this are manifold. Perhaps record labels would benefit from becoming subgroups and subsidiaries of digital technologies companies. Perhaps digital companies should invest money in creating their own labels, following in the rumored footsteps of
Apple. Perhaps labels will become a subgroup of the touring and merchandising industry, thereby flipping the current structure.
We've all heard the doomsday reports for years now: physical formats may face extinction in the near future. But the question of whether the music industry will survive the digital age is irrelevant; consumption of music products is going nowhere. The real question is: how will the music industry change in delivering these products to consumers? What will the new face of the music industry look like?