More discourse in the wake of Radiohead's self-released, pay-what-you-want album. The media has, in my opinion, gone overboard on this story. Rather than proclaim the death of the record label, Jon Fine at Business Week points to the more reasonable outcome: Manager as record label.

The manager-as-label model, though, is another model that should be kept in perspective. It works very well for very successful artists who have the kind of fan base that broad exposure through major labels can offer. It works less well for undeveloped artists. Why? Moving to a manager-run-label requires far less risk for any one artist, which means the more successful artists will get access to that capital. The rich get richer. Major labels assume a great deal of risk on any one project but can diversify that risk across many artist projects. If a manager or management company wants to start a label, there are two routes: Put money in the least risky artist or diversify the risk across a high number of projects. Access to capital will help, too, because these projects are very capital-intensive.

We should, though, take a look at some historical data to see how management-led albums have done. The best examples I can think of are the albums released through EMI by The Firm's record label and two of its clients, Army of Anyone and Mandy Moore. Army of Anyone, the supergroup consisting of Richard Patrick from Filter and three-fourths of Stone Temple Pilots, released its self-titled album in October 2006. In 13 months, the album has sold 84,000 units (8% digital). Tour stops tended to be smallish clubs. Mandy Moore's Wild Hope was released in June 2007 and has sold 87,000 units (22% digital) to date. In comparison, her four Epic studio albums range in sales from 293,000 to 950,000.

The lure of the manager-as-label model is twofold: the lower break-even point (fewer albums sold before costs are recouped) and ownership of the masters. A lower break-even point is great when sales are strong and less worthwhile when sales are dismal. Ownership of the masters is a plus if the masters have any future value -- the catch being that future value is usually dictated by an album's popularity around the time of its original release (though a successful artist will always have some interest in his/her back catalog). The downsides are mainly twofold: The albums will need to be distributed through traditional labels, and because they do not have a great financial stake in these projects, the labels will be apt to divert their resources toward those projects with greater reward (read: those recordings they owns outright). Second, a manager-run label will be less likely to have the resources and expertise of a traditional label.

Much of what I've just written applies to the recorded music industry as it stands today. The CD still dominates album sales, digital track sales are growing and subscriptions are a bit player. As the CD becomes less and less a driver in popularity, the manager-run-label will become increasingly attractive. When a far greater percentage of artists can circumvent traditional labels without sacrificing sales and visibility, this alternative model can become a game-changer.

[music jobs] Brand and Online Marketing Manager at The Ascot Club/Am Only; Brooklyn, NY.