Behind the music: Record labels on trial

A mock court hearing last week asked an audience to judge whether labels were irrelevant. Their verdict? Not guilty
Rumpole of the Bailey
Rumpole had no idea how he was going to make a defence for Craig David ...

At the Great Escape festival in Brighton last Friday, record labels were put on trial, with the prosecution accusing them of being irrelevant. It might not have been a proper trial – the audience were acting as jury – but the labels still recruited a real-life lawyer (Tom Frederikse, from Clintons, who deals with digital ventures) to defend them. Scott Cohen of digital music distributor The Orchard acted as prosecution.

It was clear Cohen was going to struggle to prove his point right from the start, as a large part of The Orchard's clientele consists of independent record labels. One of his witnesses came from AWAL, Artists Without A Label, who used the example of US singer-songwriter Ingrid Michaelson as someone who's managed to forge a successful career without a record label. She signed the usual one-page non-exclusive contract with the company, which distributes and promotes her music digitally. Some would argue that AWAL is, in fact, a label, albeit with straightforward and advantageous contracts for the artist.

Cohen's second witness was Ian Grenfell, the managing director of Drowned in Sound and manager of Simply Red. Using Simply Red as an example for the irrelevance of record labels is misleading, as their career was built by a major label in the first place. Would they have been able to sell millions of albums if they'd never been signed to a record label? It's doubtful. Besides, the witness admitted that they have a deal with Universal in South America to look after their interests there.

Fred Bolza, the vice president of strategic development for Sony (and a witness for the defence), said that the label had done a survey among their artists, asking what they thought the label does well and "what is shit". Perhaps Tom Meighan of Kasabian summed it up best: "Well, I don't wanna fuckin' do it! I walk into this building and it's full of people who do something for me." In other words, some artists just don't want to develop marketing strategies themselves.

The second witness for the defence, Korda Marshall, the former MD of Warner and now the head of indie label Infectious, pointed out that "sometimes the blind stupidity of youth" is important to innovation. "We need to take risks, and it's easier for a major to take risks while, as an independent, you might lose your house."

Later on, Bolza told me that he is amazed by the amount of digitally astute artists who still have a love for the physical product. "The forthcoming Stone Roses 25th anniversary box set will be incredibly extravagant, but even our new signings have elaborate ideas about the packaging of their CDs. If they could have it wrapped in a helicopter, they would."

At the end of the panel, the jury voted in favour of the defence. But maybe the question should've been phrased differently, as in "are major labels irrelevant?"

Of the four major labels that remain, Universal and Sony seem to be doing a decent job convincing artists of their relevance. In fact, Universal is now so dominant in the record industry that they have the power to dictate the terms of any new digital music venture they enter, often grabbing equity in the companies (it is rumoured that they have equity in Spotify), as they have the majority of bestselling acts. Their parent company Vivendi recently bought Activision, the company behind Guitar Hero. It remains to be seen if this will effect what acts are featured in the game.

So it appears that rumours of the imminent death of record labels are exaggerated. Few artists would say no to the marketing, funding and backing of a major, if it was offered to them. As U2's The Edge says: "My instinct is to stick with the record guys. They have to sell your records or downloads, whatever it ends up being. To do that, first of all, you've got to love and understand the music, and right now I'm not seeing any group that rivals the record labels."

What we can be sure about is that major labels are under more pressure than ever to prove their worth. If they just act as banks, without any creative ideas or expertise, an artist may as well just go with a venture capitalist and retain the ownership of their music.

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