Totally agree, the labels put out a slick, well produced product and have a lot of brand loyalty. And they have a huge headstart. But I think startups can build up some of that consumer loyalty by not being evil to their customers, and by providing the value add to music that major labels can't in the form of cool apps. And don't forget, even the now huge Virgin empire started as a little hole in the wall record shop on Notting Hill.
Not really. Consumers don't have a clue who the labels are. The labels are great at building brand loyalty for the artists.
There's two horizontals - the promoters (Twitter, Facebook, Youtube, MySpace, etc) which let artists connect with fans, and producer/distributers (Amazon, iTunes, indie labels).
You probably won't build a vertical that does both well, like the big labels.
The distribution and production is a solved problem. You won't distribute better than Amazon, and an indie producer will produce good and cheap records in an unscalable fashion.
The promotion thing (getting kickbacks from ads?) is social media. What do the artists need? What do the users need? And how can you do it better than Twitter?
