By: dwa2p_mtsu_s12 on 2/9/12
As a music business major at Middle Tennessee State University, I have become well aware an economic shift towards smaller, independent record labels. While this is an entirely different industry than clothing retail, I believe there are many similarities. From a major record label’s standpoint, consumers are loosing interest in buying costly CD’s and have converted to buying most of their music digitally. Even though new technology has brought about this change, people have taken this opportunity to create their own independent labels. While the major labels desperately try to up their CD sales, independent labels have harnessed the digital revolution to compete against the majors. One aspect that independent labels thrive on is their ability to keep their artist rosters small and focused. This gives them the opportunity to develop each band to their full potential while also maximizing profit. This directly contradicts the major labels goal of signing as many artists as possible in hope that 20% of them make up the profit that was lost by the other 80%. Because independents are more choosy with their artists, they can generate a profit from each act. All in all, the idea of making a business small and focused to maximize assets and minimize liabilities can be seen throughout many industries.