I think Ryan and Barrett make great points in their above comments. In a digital world where distribution is increasingly becoming commoditized and the economics of scarcity are no longer the lynch pin of a labels advantage in the market, the labels are becoming increasingly more specialized. Perhaps OKGO might be the first label that successfully develops viral music talent? Could they apply their own success of using viral video content as the delivery vehicle for their music and in the case of 'This Too Shall Pass' find paying sponsors to fund its creation? Could they replicate this for other artists? I sure hope so. It would certainly be a fun thing to watch unfold.

Having worked at Interscope Records myself I believe labels are still good at finding and developing talent and walking that talent through the recording process. They also have leverage in a variety of marketing channels and years of expertise in exploiting these lanes. The labels that can manage to refocus and sharpen their ability to find, develop, and market artists in this new economy, in my opinion will find their place in the future music business. Some of these labels as Trey mentions might be in fact savvy managers and their teams. We are working with digital marketing reps at all of the leading artist management teams at my company Culture Jam and have thus far been nothing but impressed.

Building your band like a business from day one is a requirement these days, as unsexy as that sounds… Bands need to think about targeting audiences, building revenue and creating brand value in everything that they do, because in this new music world order you are competing with others bands like businesses compete for customers more than ever before. With all the noise and low barriers to entry, you have to be Google before you can be Gaga

The real music biz question of 2010 is whether mid size acts like OK Go can succeed on their own like Radiohead and NIN did. Although the truth is that their managers have become their labels. Doing so cuts out one of the middle men and puts more focus on pushing the band's music, but there's also less people on the job. Having a good manager has never been so vital.

Although didn't OK Go have the back yard dancing video before the treadmill one? This one, which rumor has the lead singer's sister choreographed: http://www.youtube.com/watch?v=bav63MWNUKg

That being said, I think this is indicative of a larger-scale waveform flattening of media entities. What I mean by this is that if you imagine the media landscape as a waveform, there are thousands of very small peaks and only a handful of large ones. Only a business model based on extreme scarcity can produce this type of waveform visualization. Now, in a world sans viable information scarcity, that media waveform is collapsing and adjusting. The end result is a waveform which has the same number of peaks, however the small peaks are higher, the large peaks are lower, and a vast multitude of medium peaks dominates the same space.

Better said, let's imagine the entire music market is worth $1000 dollars. In the old model, $996 of those dollars were going to 5 entities, at a – just for the example – breakdown of $199 apiece. In the new model, I think $10 apiece will go to 50 different entities, $400 will go to 5, with the remaining $100 being distributed amongst the rest. The important thing is that the total market dollar value remains roughly the same – but to the traditional entities within the market, the market has collapsed.

It's important to keep that in mind when stats are shown where “music sales” (and feel free to substitute any form of entertainment) are cratering, because those stats usually only show the “major players” (aka the large peaks above.) They fail to mention the small and medium sized players who are rising to fill the holes in the market. Simply because 5 or so entities are losing money, it doesn't mean that money is disappearing into a hole, it simply means those 5 or so entities are refusing to accept their lack of continued dominance over the marketplace.

OK GO is representative of the small to medium sized players abandoning the larger entities in favor of going their own way – and rightly so. The traditional labels were mainly funding/distribution/marketing entities from an age where all of those required massive corporations with national and international reach to work effectively. Now, we function within a world where we have nearly the entirety of human knowledge at our fingertips everywhere we go, so many social connections our brains are struggling to cope, and the most effective communications and entertainment distribution system the Earth has ever seen. So aside from funding (equipment ain't cheap, though it is cheapER than it used to be – but funding can come from lots of different places) and the very ethereal ideas of “taste” and “guidance,” there isn't a lot that a traditional music label can offer an artist. Some labels are turning to “360 deals” which mean they're now controlling touring, merch, licensing, and assorted other bits and baubles in addition to the above, but my personal opinion is that they're just grasping at the last straws of the already established players.

So I'm not a musician. I can sing, but anything beyond karaoke is above my experience level. So were you to ask my opinion of what I'd do within the current marketplace, I'd say you were a fool. But since you did, I'd say that I'd do exactly as OK GO has done. I'd say I no longer needed a label for distribution, since that's more efficiently done digitally; that I no longer needed a label for marketing, since that's more efficiently done online; and that I no longer needed a label to tell me what my music should sound like. I would decline their offers to take over my touring and merch, and handle that myself.

So maybe we're about to go through a new music renaissance, maybe I'm just waxing idealistic. The bottom line is that my semi-educated guess is that this is gonna start happening a lot more frequently. Bands will start to become businesses unto themselves at a much earlier point in the game. [Clarification: bands like KISS or U2 or The Rolling Stones already are businesses unto themselves, but it used to be that happened when they became big. Now I think it'll happen when the band decides that they're going to take themselves out of the garage.] Whether this is a good or bad thing is up to your own personal opinion (mine is: good) but with the way communications and entertainment are shaking up, I think it makes economic and logical sense.

So, for a label to inhibit and altogether block the band's ability to continue the efforts that have built the success in the first place is without a doubt grounds for a breakup.

And that's what this is. A break up. You might even equate it to women in our modern society. Back in the day, women would typically have to stay with a man no matter how aweful he was because he brought in the cash, provided the shelter, yada yada. Sugar Daddy. These days, women can provide for themselves. And that gives ya'll more choice. Your man is a dick? Whatever, you can leave him because you don't need his money or his shelter or his moral support – you can find it elsewhere. That's powerful.

A label is basically a bank with some specialized services. They provide upfront capital for marketing, production, PR, and – historically – distribution. But with the Internet, they're no longer needed for distribution. That's stripped them of a monopoly they've held for decades. Ooooooo, that hurts, doesn't it.

So OK Go left its sugar daddy and is now creating its own label where it defines its own rules and can attract artists that believe in its philosophy. Will they be able to run Lady Gaga scale marketing campaigns and million dollar stage shows? No, but they don't need to.

What they do need is to have full creative control over their art. They are fortunate enough to have reached a level of success that affords them this opportunity, and in my opinion it's absolutely the right move. Damien is a creative genius, and all the label is doing is hindering the band's ability to create art. Not like that's a new thing… the suits have been at it since the beginning. Like, back when amphitheaters were in style.

But like any breakup, no matter how “right” it is, it is still going to hurt. A lot of the niceties that I'm sure the band has gotten used to will be stripped from them… expense accounts, private jets, minions that make shit happen, tour support, the list goes on. I have no idea if any of this is even important to them, but regardless it's gone now and they will feel it.

My guess is they'll use that to their advantage to fuel their tenacity in building their own label from the ground up. OK Go's most significant and valuable asset is their ability to create. And to that end, this could be their greatest achievement yet: to build a scalable environment in which others can create as freely as OK Go has been able to do over the past decade.

I'm excited to see what they cook up in the lab…

Thanks to Jon Romero for the insight into the industry. Cheers