The RIAA is funded by the big four record labels, to the tune of around $130 million per year for each label. EMI was recently bought by a private group, and are now considering drastically cutting their investment to the lobbying and enforcement arm of the music industry.

Given that the RIAA’s legal moves over the last few years have been disastrous at best, it’s a great sign for artists that the RIAA’s financial base may diminish significantly. The amount of money that the RIAA has spent suing mothers and college students as been astronomical, and has led to a severe loss of credibility toward the record business in the public eye. Let’s take a moment to look at what a world without the RIAA might look like.

Without constant legal pressure to buy, audiences would begin to feel confident that albums they buy are supporting artists’ careers (this is part of consumer confidence). File sharing would continue, but people would be more willing to buy music they love knowing that they aren’t labeled as criminals anymore. The business model of turning artists into products, overcharging for albums, and using hype instead of quality would fail.

The music industry would become a free market, where any artist with great music and dedication could create a viable career. Rather than a few mega platinum artists, we would begin to see a massive amount of artists selling between 50,000 – 200,000 units on releases. This level of sales can cause an artist to be dropped from a major, but on an indie label, this is a great living for an artist, and a massive success for the label. Royalty rates for artists would also become much higher. Some artists already see similar profits selling 200,000 units with an indie label that they would see selling a million on a major.

New contracts would become the industry standard, similar to Polyvibe’s practice of leasing artist’s copyrights rather than owning them. Artists would have freedom to call the shots in their careers. The industry would shift to artists owning their masters, with labels existing to empower artists rather than to exploit them. Album advances would shrink; the amount of money owed to labels would shrink, too. In the major label world, an artist owes almost every penny the label spends on them. Label investment in artists would become the cost of doing business, rather than a loan.

The practice of shelving albums would become non-existent, as artists would have the ability to have promises for release dates in their contracts. Polyvibe currently includes release dates in our contracts, with a provision that if deadlines are not met, we will set a new release date. We even promise in our contracts that if we do not release an album within a set span of time after receiving masters, the artists is free to go elsewhere with their album. This type of provision would be standard fare, as well as other artist protection clauses.

Marketing, promotion, and booking companies would become the major players in breaking artists. The media will flock to what people want instead of what the Big Four tell them to promote. New and far reaching models and methods of grass roots promotion will become the norm. Music quality will again become the primary factor in an artist’s success; promotion and hype will be a second tier service. Radio will begin to offer a wider variety.

Without the ability to force legislation in their favor, major labels would become the victim of a music economy they no longer control. Consider that what allows major labels to force low quality music down our throats at high prices is their ability to grab politicians ears, to threaten us with lawsuits, and their near domination of media exposure and radio. We are now at the tail end of a 60 year monopoly on the music business. Rats swarm off of sinking ships, a perfect analogy for the exodus of mega-artists from major labels (getting off the ship, not the rats). In this new music environment, there will be dozens (maybe hundreds) of popular labels, and everyone will have the opportunity to create success.

Bottom Line: Without the RIAA, the major label business model will be obsolete, and a new paradigm and renaissance for music will appear within five years.