But there’s another element to be considered in the long term analysis as well, isn’t there? What about the labels ability to recruit and retain artists? If the effect of preventing embeds is to reduce videos’ viral impact and hence the sales/attention driven by that impact, labels that follow this policy will find themselves less able to develop new artists and less able to stimulate new interest in catalogue artists.

And labels that are inclined to follow this ‘enforcement’ strategy are likely following it across the board rather than just in regards to music videos, i.e. they’re working harder to bust mp3 bloggers, p2p distributors, and all of the other new web-scale promotion channels.

Unless all of us who believe in the efficacy of these channels are totally crazy, in the long run, the artists on these labels should see reduced success: fewer fans, smaller sales numbers, less traction with live audiences.

In a world where distribution is free, the only value the labels provide is the power of their promotion engines. Denying themselves access to the promotion outlets with the fastest growing reach seems like a serious long term strategic mistake in these conditions. If all of the artists jump ship in order to take advantage of these new outlets directly (or in favor of new enterprises that will help them do so, as has already happened in a number of high profile cases) what will the labels be left with?