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Some established artists are raising their Web profiles to escape the shackles of record contracts; others do it to pander to fans. Last year the artist currently known as The Artist negotiated a record deal that allows him to sell his CD from his own website. Aimee Mann bought back her master tapes from Geffen and is selling her new disc through the e-commerce site artistdirect.com Grateful Dead successors Phish put up free MP3s of some live performances, causing dramatic drop-offs in worker productivity in the San Francisco Bay Area.
But even in a digital world in which music is given away and traded free, record companies won't go away. Dick Wingate, senior vice president of Liquid Audio, a digital-music company that works with the major labels to distribute music in a copy-protected digital format, says that "there's too much noise out there. You have to find a way to let people know it's there, and that costs money. Record companies have the money."
Indeed, far from killing record companies, the Internet is spawning even more of them. "I don't believe that having 30,000 songs by any number of unknown artists is what the average consumer is excited about," says Al Teller, the former head of CBS Records and MCA Music Entertainment Group. Last year Teller founded an Internet record label based in Santa Monica, Calif., called Atomic Pop, which has released albums by Chuck D and Ice-T; they can be purchased from Atomic Pop's website in the form of a CD or a downloaded file. The musicians keep half the revenue, compared with the 10% they get in traditional major-label deals. Start-up Web labels pose threats to the majors, but they also may siphon the audience that frequents all-comers sites like MP3.com by going after high-profile artists and acting as a filter for all the noise on the Web.
And that's bad news for indie musicians. Even more ominous is the reality that the major labels are finally making their move online. In January Warner Music agreed to buy rival EMI, which has already announced plans to begin releasing digital singles and albums from its stable of artists. Jimmy and Doug's Farm Club reflects the changed environment: it's a hybrid of a traditional record label and a freewheeling, indie-friendly MP3 site. While the music of artists officially signed by the Farm Club will be promoted and marketed by Interscope or another Universal imprint (and given face time on the label's USA Network television show), the website will allow undiscovered bands to upload their songs too.
But for indie acts trying to make themselves heard, life won't get any easier. Someday, the labels hope, consumers will walk up to Web-enabled kiosks in convenience stores and airport terminals, punch in a credit-card number and instantly download two new Mariah Carey songs onto a cassette the size of a pencil tip. When that happens, who's going to bother trawling through thousands of MP3s for the next Fisher? That's why, sitting at a Melrose Avenue cafe early this year, Fisher and Wasserman seemed more relieved than elated. There are now at least 1 million songs available for download on MP3.com "It's already too saturated," Wasserman said. "This is going to become a single-driven business. I mean, as soon as every big-name artist has a presence online, who's going to look for an unknown band like us?"