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Labels were never about discovery. They were about promotion, production, and all of the expensive stuff you need at scale. For example, Justin Beiber, Lorde, Billie Eilish, Lil Nas X, were all discovered independently due to their own efforts and had decent success on their own. (Farther back in time, the Beatles and most classic rock bands similarly got signed to labels after demonstrating success.) But they're all signed to major labels now, because touring is expensive, and the scale of exposure you get with a label is very different from what you get on your own, and the income correspondingly increases as well. In many (but not all) cases, the artists usually also get lump-sum advances against new albums or singles which removes the financial risks for creating new music. Piracy was never about discovery. It was simply about people being too cheap to pay for other people's work. Sometimes, as with Adobe and Microsoft, they were okay with it because that just locked in their market dominance and created more future customers. But for fad-driven and taste-driven industries, privacy has a notable impact on creator's earnings. |
The traditional business model of a record label is almost entirely obsolete, and they need new revenue streams. That said, the people who run these businesses are antithetical to innovation and creativity in business and that's why industry groups like the RIAA exist in the first place.