Virtuous cycle

Bartlomiej Owczarek weblog

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How many Radioheads it takes to bury recording industry?

For years, record labels have been busy fighting file sharing on the Internet. This activity gave them a good excuse not to bother with changing their obsolete business model. Today, however, Radiohead’s move to release their new album on “pay as much you like” basis may indicate that it will be top bands, not pirates, who will bury the labels.

Label business model is the following: revenues from top bands allows them to invest in promotion of the new ones, in hope that some of them will eventually reach the top, too.

Now, though, top band can itself distribute its music on the Internet at marginal cost. Why share profit with label, then?

Problem with bands is that, in contrast to the customers, they actually own the music, so there is no option to sue them.

Enough top bands head to the doors, record industry model collapses.