Yesterday, we posted the YouTubers’ version of “We Are the World” at Videramos.

Virtually all of the above performers have their own fan base.  That’s good.  Unfortunately, I’m fairly certain that some of these artists have aspirations for a 20th century-style record deal.  This isn’t to fully discredit the 20th century way of doing things, for there have been lots of classic records from last century and a handful of good albums from last decade, created under the old major label/pseudo-minor label system.

However, this system isn’t going to work much longer for many.

A “record deal” is essentially a loan from an entity with money (the record label) to an entity with no money (the recording artist), with a lot of terms usually favoring the lender.  The YouTube artists above (as well as other aspiring musicians) must realize that they need not wait for the record deal; they are the record deal.  They don’t need an entity to finance a record at a Pro Tools-retrofitted recording studio and some shaky distribution guarantee.  Their webcam, PC mic, acoustic guitar, and voice can be their music studio.  They can save a few hundred and cut an EP at a local Pro Tools-fitted, modest recording studio.  They can save a couple of thousand and build their own bedroom studio with quality hardware and software.

MP3s are the medium of right now, even if it is lossy and flawed.  Aspiring music industry 2.0 artists can use TuneCore or AmazonMP3 (etc.) to handle distribution.  Compared to signed artists, an independent artist gets a larger cut of each mp3 sale.  Signed artists get pennies from the label’s cut of the sale.  Independent artists share each sale with the distributor.

A record deal could mean that the label will market and hype the artist, as long as the artist is currently marketable and part of the hype.  The last clause of the previous sentence is important in the crapshoot of the record deal.  The artist is either IT/in/now/current/hip, or their product will end up in the bargain bin (and they’ll still owe their lender the record company).  Instead of the label hype machine, consider the following:  Social networking, online/offline advertising, getting music to ears by gigging or otherwise, and the realization that niche marketing is more effective than pretending to be the middle-of-the-road IT/in/now/current/hip.  All these things can be done without a record deal loan.

Sure, this is a rant against the record industry of yesteryear.  This is not a rant against sensible business practices.  (The artist must realize, in order to pay the bills, art must be balanced by good business.)  If you are a music industry 2.0 artist:  Come up with a good business plan.  Hire or partner with a non-artistic business manager.  Get some legal advice from entertainment/music attorneys.  Essentially replace all the functions of a record company with elements in your control.

If all independent artists aspired to this sort of steady success, then we can leave the old record industry to their old mainstays.  I’m pretty sure they can still reissue a good album every so often.