Who knows what the consulting world would think if Radiohead was still with EMI and Trent Reznor was still with Interscope. Obviously the emergence of a single, experimental business model -- never mind that Radiohead has licensed its album to record labels for physical and digital release -- has experts thinking the record label cannot survive.

Yesterday the Yankee Group announced a report that predicted that "record labels will become marginalized." (Read press release.) In addition, the report sees music industry revenue stabilizing "over the course of the next several years" (I'll assume several means three to four).

Said Michael Goodman, director of digital entertainment at Yankee Group:

"It's not just that the record labels are facing declining revenue; rather, the basic relationship between recording artists, record labels and consumers is in major flux. As bands retain ownership of their music, the record label's role shrinks while the role of technology vendors and online music stores grow."

I think Michael and the Yankee Group is overstating the future downfall of record labels. (Though I'll point out that the press release is a bit iffy on just how doomed labels are. The press release's subtitle mentions "the demise of the record label," but the body of the release mentions only labels becoming "marginalized." Nothing like sexing up a cautious doomsday prediction.)

But maybe we should start with the role and definition of a record label. I sense that Yankee Group believes a record label is a static entity that owns right to master recordings, distributes music to retailers and will retain in perpetuity its current "buyer's market" type of artist contract. If that's the definition, then I agree with the company's bold prediction.

The role and definition of the record label, however, is changing, and I believe it will evolve greatly over the next five years. Yankee Group was right to point out changing of ownership, but who says a record label must own to be a record label?

If a record label is to become a services company that finds, develops, markets and promotes artists, then I believe record labels will be relevant for many years to come. As long as record labels are moving into comprehensive deals that include touring and merchandise (e.g., Paramore), as long as artists can use music to create a valuable brand (e.g., 50 Cent), as long as they are experimenting with innovative online models (e.g., RCRD LBL) and as long as it still takes an army to create a household name, I'm confident labels will stick around.