The Sorry State of Music Startups
techcrunch.com
techcrunch.com
Correct me if i'm wrong, but it seems thesixtyone is a play for the artists ie- upload your tracks here. In turn, by empowering the artists, the consumers have an awesome experience.
That being said, music industry executives are not as dumb as we see them. The music industry has a hold on America that is not going to fall soon. The industry is pushing artists to sign 360 degree contracts so that record labels do not rely solely on record sales. This will encourage distribution of free music in order to increase tour sales which record companies are mostly cut out of. This will make the ultimate surrender date a change of model, not a killing of the industry.
The venture industry is out now because they realized that the record companies control the market and aren't too eager to give others control of their product.
Nonetheless their current "parasite" model can prevail as long as they control the broadcast channels. But technical progress should mostly do away with that, too. It just takes time.
Eventually car-radios will begin to support recommendation-based IP streams (ala last.fm) in addition to the current pre-select. I expect that to become the tipping point from where the consumers will gradually reverse the mainstream (from top-down to bottom-up).
Let's you say to started up a company tomorrow that looked ready to put the labels out of business and make a zillion trillion dollars giving everyone exactly the music that they wanted, no less and no more. Ask yourself, would the labels go to Congress to get a law passed that made your company illegal? And the answer you get to that question is "yes". And then the second question is, would Congress give them that law? And the answer to that question is also "yes".
Unless your startup can be fully successful without ever touching a single commercial song, it's doomed before it starts. Only an idiot would throw money or time down that rabbithole.
However, there is plenty of room to do interesting things without touching music tainted by the Big 4 labels. We are doing it with Mugasha in regards to electronic dance music and TheSixtyOne is doing it with indie music. The niche is your friend, the major labels are probably not.
Also, I think it's time to realize that basing your business model on advertising isn't working. These services are going to need to start getting creative with their business models and start making money on things people want and not things people hate (ads).
The sooner musicians get rid of them the better...