What Major Labels Get Wrong About Platforms, and What Platforms Get Wrong About Labels

One of the more interesting things happening in the music industry is how much closer labels and technology companies are moving towards each other. Labels are investing in data, product, technology and direct relationships with audiences, while platforms are moving further into artist services, content and rights. Both have good commercial reasons for doing it, but I think there is a risk in assuming that owning more of the same territory automatically makes a business stronger.

That’s the trap on both sides.

I first started thinking about this properly when I was working in digital at Warner. My role was to find technologies, platforms and partners that could be useful to Warner’s artists and work out how they could create commercial opportunities. When I was promoted to oversee digital at Warner Music UK, Music Business Worldwide described the remit in much the same way.

That was always how I thought about technology: a way to solve a problem or give an artist access to something they didn’t have before, rather than something the industry needed to get better at for its own sake.

The labels have come a long way since then. They have much stronger technology and data capabilities, better direct-to-fan infrastructure and a much more sophisticated understanding of how digital products and platforms work. That is a good thing. The industry needed it.

But there is a difference between becoming better at technology and becoming a technology company, and I think platforms need to be equally careful about that distinction.

A platform can be very good at building products, understanding user behaviour, experimenting quickly and creating new ways for people to discover and consume music. It can build valuable services for artists and develop businesses around those relationships. But being close to the artist doesn’t automatically give a technology company the expertise that exists inside the music industry around repertoire, managers, territories, marketing, promotion, culture and the development of careers.

I have worked on both sides of this at EMI and Warner, then at Napster and SoundCloud, and more recently through consulting work with technology and music companies, so I have spent a lot of time looking at where the two industries understand each other and where they still don’t. One of the things labels can still get wrong is treating platforms as distribution channels with a large audience attached. They aren’t. Spotify, SoundCloud, TikTok, YouTube, Amazon and Apple all have different products, audiences, economics, cultures and reasons for wanting to work with the music industry.

If you want a platform to do something meaningful for an artist, you need to understand what that platform is built to do and where the music fits into its wider business. That sounds obvious, but I have seen plenty of situations where the label’s starting point was what it wanted from the platform rather than what the platform could do particularly well.

At SoundCloud, that was especially relevant because the relationship between artists and audiences was unusually direct. The platform had its own culture, its own community and its own way of helping artists build audiences. During my time there, I spent a lot of time thinking about how labels could work with that rather than treating SoundCloud as simply another place to distribute music.

The difficult part is working out where technology creates an advantage and where music industry expertise simply can’t be replaced. That kind of understanding has to work both ways.

Technology companies coming into the music industry can look at the complexity of the industry and see a lot that could be made faster, simpler and more efficient. They can be right about the technology. Where it can go wrong is assuming that everything that looks complicated is unnecessary.

Music is a difficult industry to reduce to systems because the thing being developed is ultimately a person and their relationship with an audience. Artists don’t behave like software users, and careers rarely follow a product roadmap. Culture can move before the data catches up, and a manager’s judgement can matter more than a dashboard. Sometimes a record becomes important for reasons that never show up in the numbers at all.

The major labels have spent decades learning how to operate within that environment. Some of the processes around it need modernising, without question. But the expertise itself has value.

That is one of the things I found most useful about working at SoundCloud. The best conversations with labels weren’t necessarily the ones where we agreed. They were the ones where we both understood what the other side knew that we didn’t, and could use that difference to get to a better answer.

There are obvious commercial reasons why both sides are moving further into each other’s territory. More control can mean more control over economics, data, customer relationships and the experience around the music. For labels, better technology can improve decision-making, artist services and audience understanding. For platforms, deeper relationships with artists, content and rights can create new businesses and strengthen their relationship with the people creating the music that brings users to the platform, and I don’t think either side should stop doing that.

What I question is the assumption that the end point has to be owning as much of the value chain as possible.

A label should understand product, technology, data and consumer behaviour well enough to make good decisions about them. The same goes the other way: a platform needs enough grasp of artists, repertoire, culture and the realities of the industry to build things that actually work for the people using them. Neither needs to become the other.

The strongest businesses I have worked with tend to be very clear about where they have an advantage and where they don’t. They know what to build themselves and where a partnership will get a better result than trying to control the whole thing.

As the boundaries between technology and the music industry continue to blur, that discipline becomes more valuable, not less. The advantage will sit with the people who can understand both sides properly and know where they complement each other. That means understanding the technology, the commercial model, the platform, the music industry and the people using all of it. That is the space I have spent my career working in.

Labels becoming tech companies, or platforms becoming record companies, misses the point. Both need to get better at understanding the other side, and confident enough in their own strengths to know when to build it themselves and when a partner will get them there faster.