Music ownership and distribution is a broken business, its a good product with a broken business model. While we can talk about various flaws, I will concentrate on a couple:
1) Hit or miss dynamics leads to too much risk accumulation -> there is too much risk at every single record label. The music industry is not unlike the oil exploration business - you invest in various assets, with the expectation that the return on a reduced number will outweigh the investment in the losers. Betting on too many losers and you can lose the house. Furthermore, its a little different than oil exploration in the sense that by further investment in a presumably dry oil well can bring actual oil... the problem becomes when the threat of betting the house on losers, actually leads to lack of investment in potential winners, thus eroding any future winners as the current winners age. Potential solution-> create consortiums where various firms or investors spread their risks (investments) over a larger number of potential winners.'
2) Standard pricing for non-standard quality... there is a tendency to look at all music products under the same light - they have the same price, while they don't necessarily have the same value, but, wildly divergent values. From the price charged at the retail point to the idea of pricing the content the same to TV distributors or online distributors, the price is simply not discriminating the value and this could be the wrong formula.
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