Twins, two people that have similarity.  Crazy enough, I’ve got a twin brother – and we aren’t identical twins (this is what he looks like). 

He knows a bit about music and music culture – he just finished up his Masters of Music Composition and Arranging at Belmont University in Nashville, TN. (Here’s a link to some music he wrote/arranged.  Fav 1 (start 1:54), Fav 2 We were in the car recently and he was talking about the state of the music industry, and how it’s broken for both labels and bands, and attempts at variations have been mere band-aids. He mentioned how the niche-label market is broken, but the indie label market helps musicians keep ownership but they make less money, and how the mainstream label hopes to produce a few blockbusters to float the rest of the music we really like. 

As he was saying this it struck me, if you profiled the music industry you’ve got bands/artists who are hoping to get noticed by the big labels so they’ll sign a deal and have money and connections to make an albulm that sells like crazy and installs them in the hall of music fame.

Sound familar? Taking out the music references we’ve got startup founders, trying to get noticed by venture capital firms so they can sign a deal and have capital, connections and advisors that will help them to produce a product/company that sells like crazy and ends with an IPO or acquistion.  Not to mention the comparisions between band members and early startup staff.  So we’ve got twin industries.

What is the model that music labels use currently?  I honestly don’t know – but I what if the music industry made a shift and started to approach bands/artists like VCs approach startup companies.  But why not?  I’m sure Fred Wilson (my VC pundit of choice) would happily share insights with a few select major labels.  What I’m not saying is that music labels are roadkill, I don’t believe that. But I don’t think the face melting guitar solo playing rockstar model of labels is going to last in it’s current form.  I do believe they currently use a system for finding, signing, and promoting bands that isn’t necessarily primed for ROI.  (Off topic, same with books, although I’ve been very impressed with Michael Hyatt and his changes at Thomas Nelson).

The music industry is changing, artists like NIN are using technolgy (iPhone app, sales via their website) to change what they are about for their community.  Radiohead did the pay what you want release on their site.  Were these homeruns? Not really, but they indicate change and unrest in the industry

These changes have the potential to make music better for us as listeners and also create opportunities and environments that offer better compensation and resources for artists.  This is a win-win – and if you’re like me can you imagine even better music!?

So my suggestion is that music labels take a VC approach to their market.  Music is an art, and it’s infused with passion, but I’m pretty sure I can find programmers and engineers who feel the same about what they do and labels exist for the same reason VC’s do, capital returns.

But I can imagine a world where a budding band, gets hooked up with an early-stage label, who provides some cash and some connections and eventually they are on the biggest stage they desire.   Rags to riches, but they don’t lose all their IP in the process, and the label spends small amounts of money on some bands and the ones that are profitable get additional funding.

So Sony BMG, talk to some venture guys in Nasvhille and learn about how their industry works – and begin to adapt it to yours and I’ll eagerly wait to see what happens.