Record labels are going the way of dinosaurs as creative entrepreneurs develop less costly methods of development, recording, promotion and distribution.
Although the transition from physical to digital distribution caused the recent lawsuit between rapper Eminem's former publishing company and Universal Music Group, further digital innovation could actually prevent future legal issues between powerful record labels and their artists (...because the labels will not exist).
An example of this sort of innovation is slicethepie.com, a site dedicated to the exposure and development of new musicians. Artists put up a profile page reminiscent of MySpace music pages, but the purpose of a slicethepie page is not just to promote the artist- it's to attract investors and finance a record. If an artist generates 15,000 pounds ($21,000) or more on the site, they are given the money to make and advertise an album. If they do not raise the money, it is returned to the investors.
For the service, slicethepie collects 20p per purchased track plus 10% of all investment earned from their site. This includes digital distribution charges through TuneCore to music stores like iTunes and Amazon. As listed by slicethepie, the artist will collect approximately 3 pounds per album, based on a purchase price of 8 pounds. In the US, songwriters usually receive 9.8 cents per song on a physical album sale. This would translate to about $.98 per album, or 70p, depending on the exchange rates. Granted, these numbers are artist specific and can change with each contract, but if what slicethepie says is wholly accurate, they are giving three times the amount of money per album sale to the artist. And the initial investment does not need to be recouped! That means no artist goes into debt and everything is profit. In an announcement this morning, Slicethepie allied with social networking site bebo. The ally with bebo strengthens the community that makes the UK financial development platform more relevant.
It takes a special kind of musician to do everything himself, and an even more special musician to be good at it. But the possibility of making three times the profit on an album and building a community of fans who love your music at the same time is encouraging. New music. New ideas. New allies. Stronger music community...And you can get paid to write reviews. Definitely worth a look.