At Musexpo an A&R panel decried the lack of good albums being brought to market. "We don’t make enough good records," declared Epic Records managing director. Well, if major labels release fewer albums compared to ten years ago -- which is the result of smaller staffs and lower revenues -- it stands to reason there are going to be fewer good albums released.

If fewer albums are released as revenues drop, there will be higher expectations placed on each one. Each will have a shorter window to prove itself able to recoup before the artist is dropped. This is a climate that discourages risk-taking. Today a label is more likely to sign a band that has a decent fan base in tow (e.g., an emo band that has toured for years and has two full-length indie releases under its belt) than a complete newcomer that will require starting from scratch (and thus carries a higher level of risk).

What labels have assembled is a portfolio of low-risk assets. Higher payoffs come from assets with higher risk, but the majors' rosters don't have room for risky assets. Their rosters are becoming the music equivalent of tax-exempt government bonds.

Ironically, the majors have much more stomach for investments in risky companies (MySpace Music, imeem) than risky artists. It should be the other way around. These are music companies after all, not venture capital firms.

Labels' shift toward safer rosters mirrors the trend in major motion pictures. The movie industry is addicted to sequels and putting money into safe properties (e.g., Marvel Comics characters, television shows).

"It's about finding great music and great artists, and not getting distracted in the process," said Raphael (as quoted by Billboard's Jen Wilson). And that's the problem. Music companies have allowed themselves to become distracted. They've become far more concerned with how to sell rather than what they're selling.