Democratization of Music is Making Major Labels More Relevant Than Ever, Not Otherwise - Warner CEO, Robert Kyncl Argues

The proliferation of digital platforms like YouTube, SoundCloud, and indie distribution services such as TuneCore, DistroKid has enabled artists to hold their own, rather than pinning their hopes on landing deals with major labels.

Over the years, this shift has sparked debates and even assertions regarding the future relevance of major labels. There are tons of them everywhere - from blogs to social media - I’m sure you must’ve come across one at least.

According to Warner CEO, Robert Kyncl, major labels will not just remain relevant, but they will become more relevant than ever. Kyncl’s stance is grounded in the belief that “the music business has grown larger, faster, noisier, and more complex, with democratized distribution creating a flood of content on platforms”. Hence, the role and relevance of large music companies like major labels is growing crazy.

He argues it has become so difficult for artists to cut through the noise, which is where major labels step in, as they [labels] are renowned for their ability to collect, analyze large data, and make it actionable - consistently. This is something individual artists might be unable to do, given the resources and skillsets needed. He supports his argument by highlighting major labels’ global marketing footprint and expertise, coupled with the right technical know-how to develop systems and extract data tailored to each artist or project. He mentions there’s a reason why songs from major labels accounted for 94% of the tracks on the Billboard Hot 100 charts in the past quarter.

Kyncl draws parallels between today's music industry and the advertising industry a decade or two ago. He reminisced the rise of Google AdWords and how it was followed by speculation that traditional advertising agencies might become obsolete, as businesses could easily create customized ad campaigns from their computer.

Contrary to predictions, Ad agencies did not vanish. Instead, they evolved to become primary clients of companies like Google. That evolution was due to influx of more and more platforms and technologies that led to complexity; so businesses sought assistance in navigating all that and agencies lent their expertise. Kyncl argues that a similar development is unfolding within the music industry, making record labels all the more relevant in this time of technological advancement.

He also mentions the complexity of music being broadly distributed, and as more individuals upload content and gain visibility, the noise escalates and it becomes harder to break through. So, this is why artists need ‘an army’ behind them for a sustainable career and repeated success.