What Would Music Sound Like If All the Record Labels Went Out of Business?
An interesting thought experiment, no? Let’s see where Quartz goes with this.
When you think about highly capital-intensive industries, music doesn’t usually spring to mind.
Yet billions of dollars are spent each year by record labels on scouting and developing artistic talent. In fact, as a percentage of revenues, labels spend more than many other investment-heavy sectors do on research and development.
Or so they say. The data in the above chart comes from a recent report by the International Federation of the Phonographic Industry, a trade association for record labels. (The music industry is notorious for its long history of dubious accounting methods but we’ll take this one on face value).
The report is important because it comes at a time when the relentless impact of the internet is forcing a major rethink about the future of the music business. Physical sales and downloads are in freefall as streaming music services (which generate smaller royalties for labels and artists) continue to grow in popularity, if not yet profits.
