Just over four years ago I wrote a post about the music industry and how I didn't think there was any end in sight to major labels. I read this article today and thought I would bring up the topic again.
In the Techcrunch post, the author says that artists will have to start relying on other forms of revenue as the music itself slowly becomes cheaper. Right now that is the case anyway, the band itself makes very little from digital downloads or from record sales, so that won't change much. What will change is the money the consumer spends to the music will go mostly to the artist, though the cheap price will probably net them a similar amount.
My impression remains the same when it comes to the music industry in general. We will never see that demise of record labels, though I do think now that we will see the fall of many labels that do nothing more than exist for distribution.
The money issue still exists. Many bands don't have the money to produce a record, and while it is becoming cheaper to do it, the fact still remains that there is talent involved in mixing it and that might not be something a first time recording band could do. Due to digital copies of music being sold more readily, distribution is becoming a point I am willing to concede. The ease of digital downloads has become far greater in the years since my first post.
There are also legal issues that labels take care of that would fall to the artist. This can be expensive. For experienced and bands that have staying power (ie, Nine Inch Nails and Radiohead), this is something they can easily afford, but for a new band just getting to the market it would be more difficult.
As for Mr. Arrington's mention of art being supported by a federally imposed music tax, art should not be government sponsored. If a band or artist is unable to make money producing their art, then they should do something else, or maybe pick up a second job serving fries at McDonalds. I wouldn't expect the government to step in and tax everyone else to support me if I couldn't do my job to the satisfaction of the people who utilize me.
I think record labels will be around for the foreseeable future if for nothing else than to serve the bands that don't care enough to do a lot of this stuff themselves. Some band (ie, Aerosmith and Metallica) who in my impression continue to create music to increase their fortunes rather than because there really enjoy writing and recording music.
Anyway, there is my four year update, expect another post in April 2012.