Record Label Models Dying

As traditional record labels moan, lose money and lay people off, new models like Sellaband and Sliceofthepie point the way ahead.

CDs sales are down and major labels complain that digital sales haven’t made up the shortfall. EMI, now in the hands off an equity company, is laying off2,000 people and artists are threatening to go elsewhere.   The old guard is crumbling, and the way business is done needs to change. That seems to be ably demonstrated by the fact thatnew-style music labels like Sellaband and Sliceofthepie are doing so well.   Both operate online, and raisesmall sums from a large number of investors to finance the recording of albums by new artists. And both have proved remarkably successful. Sellaband has negotiated a deal with Amazon giving it its own store, while Sliceofthepie has raised $300,000 in just six month, and plans to sign more new acts that most of the majors, Vnunet reports.   Sellaband released 11 albums in 2007, each one costing $50,000, with profits – so far $25,000 – split between artists and investors.  "Two years after leaving the business I went to a conference on the future of music," said Sellaband boss Johan Vosmeijer, former head of SonyBMG in Holland. "I heard speeches frompeople in the know and those still in power and nothing has changed. I drove away with smile on my face knowing that we have nothing to fear from them. It is a pity, because there are great peopleworking for record companies. It’s just that the top level isn’t listening."