Sometimes I wonder why record labels even exist anymore. I know they do marketing and distribution of their acts. But aren’t we at the point where they can be service bureaus? I guess they have their leverage because the way they do distribution and marketing cost a lot of money. So they’re kind of like super-involved VCs doing both the financing for your music “startup” and the marketing, distribution, and sales. It seems like the cost of creating music has gone down incredibly, and the cost to distribute it is essentially nil. Aren’t we at the point where record labels should just go away?

The now defunct mp3.com (domain bought by c|net and relaunched as a different site) had the right idea in my opinion, but they went under. Now Indistr is doing something similar (from my perspective). Would an established artist who is about to renew their contract with their label ever use Indistr? If not, why not? What am I missing? Is it psychological? When the commercially successful artists create their own record labels are they essentially working with a major label as a service bureau and keeping the lion’s share of the revenue for themselves?Isn’t the real battle with record companies getting them to understand that they are marketing service bureaus and need to radically retrofit a new cost structure based on the realities of that business as opposed to the distribution bottleneck business?

I’m sure I’m being naive but I’d love for someone to explain this to me.