A New Spotify Initiative Makes the Big Record Labels Nervous

Ben Sisario, writing at The New York Times:

Over the last year, the 12-year-old company has quietly struck direct licensing deals with a small number of independent artists. The deals give those artists a way onto the streaming platform and a closer relationship to the company — an advantage when pitching music for its influential playlists — while bypassing the major labels altogether.

Although the deals are modest — with advance payments of tens or hundreds of thousands of dollars, according to several people involved — the big record companies see the Spotify initiative as a potential threat: a small step that, down the line, could reshape the music business as it has existed since the days of the Victrola.

This feels inevitable. At some point these digital streaming services will have better algorithms for figuring out what music is not only going to be universally popular but also own the distribution method to help make it so. At that point, what’s the point of a record label?