Yes, the established music industry is in a total state of flux. Startups certainly aren’t immune to the madness either. Dalton Caldwell, founder of now defunct imeem, says startups should stay the hell away (my words, not his). Then you have the CEO of MOG, David Hyman, who retorts that the proof is in the pudding and it can be done. Now Caldwell got burnt and Hyman hasn’t (yet), so one might erroneously conclude that their different opinions are just a result of their different experiences. This may be somewhat true. But really I think they’re both right.

You could, but you really shouldn’t

The fact is they really aren’t saying anything contradictory to each other. They both recognize its an  incredibly complex industry thats difficult for newcomers to navigate. Oh but you’re an expert? Because your CD/mp3/Vinyl/whatever collection is bigger than all your friends’? Yea, thats probably not going to help you deal with the business development departments at the Big 4 labels. Its just plain hard, okay? Both Dalton and David really drive home one key point; its a numbers game. If you’re selling downloads of label music, you’re going to have slim margins (lots of hands in lots of pockets). If you’re selling tools for musicians, you’re going to have slim conversions (they’re not called starving artists for nothing). To be profitable in this space, you must walk a very fine line when it comes to your financials.

So what?

So just do it. There has been a growing sentiment among startup folks these past few months that doing anything music related is just plain suicide. Maybe. The music is an oligopoly; controlling power rests with Universal, Sony, EMI, and Warner Records. The startup’s job is to poke and prod, trying to expose their weaknesses. Once a significant enough weakness is exposed and leveraged in one of the labels, the rest will ultimately follow suit. But without the nuisance of innovation, the Big 4 machine will not and cannot change its course.