Four Mistakes That Killed the Record Industry

It turns out it wasn't the MP3. From Broken Record with Jeff Blake:

"It's expensive to develop an artist. It is common knowledge that for every 12 artists signed to a label, 10 lose money, 1 breaks even and 1 makes enough to pay for the development of all the others put together. It's a really risky business. But, the small independent labels didn't care because they wanted to discover the next Bob Dylan or Bruce Springsteen. They knew that one major success could make up for a string of costly failures.

Unfortunately, that equation doesn't work in the corporate environment. You have to justify your budget every year, every quarter. If the only way to do that was to release lowest common denominator music that would sell fast but fade just as quickly, you did it.

They even managed to forget how they got to this point in the first place somehow missing that what are now termed "heritage" artists like Springsteen, Tom Petty and others were what sustained them over the long haul, not The Backstreet Boys and Britney Spears. Those were bands and musicians developed over years and they didn't come cheap, but they made up for it in the long run."

You can read the whole article here.