A recent article from the CEO of UK’s Association for Independent Music (AIM) spells out the changing dynamics between the major record labels and the independents
She notes that a paradigm shift is occurring:
Over the last couple of decades the major record companies have become ever more homogenized. There are now just 3 major labels, Sony, Warner and Universal
These labels continue their specialization These companies specialize in the industrialization of music. That is their business model is predicated on scale. Yes, they invest in music and yes, they develop talent but focus is to shift as many units to as many people as possible.
The existence of Apple Music and Spotify brings to light the different way majors and independents approach commercial negotiations with other stakeholders
Ever since the majors started demanding advances and equity from digital music companies the nagging question has always been, “where is the artist’s share?” “Where is the share of independent labels that are distributed by majors?”
The independent music sector by contrast cares passionately about the artists it works with. Independents and artists are natural allies – indeed, they are often the same people.
The major record companies have dominated the market for decades. They have been at the heart of all of the key decisions affecting the global industry and have dictated the shape of the business.
Their sheer size and depth of catalogue has given them immense power, but that is changing. Their market share is shrinking; their ability to dominate the global market is weakening.
Independent music now has a seat at the top table and is a growing force.
As the industry evolves, the indies, together with artists, are playing an increasingly influential role in shaping its future.