It’d be interesting to map out the history of the “recorded music business” against recording artist needs.

Early on, there’s especially a need to access scarce technological resources (the means to record and manufacture physical discs). Then, later, there is especially a need to access scarce distribution channels (be part of a popular record label and/or genre outlet).

These days, the needs look more and more like “commodity” services, e.g., it’s about as hard to find a way to meet my need for a bookkeeper as it is to find a way to have my CD manufactured and sold (thanks to CD Baby for the latter!).

However, there are some cultural factors that come into play, as well. IMHO, being a successful musician means having a successful business–and many talented musicians don’t think that way or otherwise don’t have the business skills.

So, the “label” model has a function in that it provides a “business” for musicians who aren’t into or otherwise ready to create their own business. A lot of the “label” business models out there involve preying on musicians’ lack of business savvy.

There are also cultural reasons why people think in terms of genres and gravitate towards “trusted” marketing channels, aka the so-called “taste makers.” Both fans and musicians look for social confirmation that their tastes are “good.”

Again, the “label” model has a function in terms offering social confirmation. And again, their business more or less preys on the fact that, to some degree, they can manufacture this, e.g., they can promote an artist as being “good” so much that a lot of people really believe it and it even changes the definition of “good.” (I saw a commercial on TV yesterday about how the Eagles were the greatest American band of all time. . .)