9-510-055
REV: MARCH 17, 2010

JOHN DEIGHTON LEORA KORNFELD

Ne ettwerk Digita Mark k: al keting in the M Music Indust try
Fo fifty years the goal of a or aspiring musi icians was to be signed to a major record label. Su o upport from one of the la arge music lab bels had been essential to the success of an artist. By 2009, how n o wever, major label profits and power were declin r s r ning. Had the point been reached wh n here a band could prosp without th support of a major label per he l? Ne ettwerk was an independ dent music la abel, publish and mana her agement firm In July 2009 its m. found Terry Mc der, cBride, joined forces with Brian Messag a partner in the comp d ge, pany that man naged Radio ohead, to offe the indust a new ide Under th name Poly er try ea. he yphonic they would inves $20 st millio of seed cap on pital to put ba ands in charge of their own careers. “It’ pretty much a venture capital n ’s h firm f bands,” on of the partn for ne ners told Billb board magazi 1. ine Al lternate structures for fina ancing and p promoting rec corded music such as art c, tist-run labels had s, been tried before without much success. Wh gave thes investors h w h hat se hope in 2009 w the belie that was ef digitiz zed music an the Intern would com nd net mbine to cre eate new, low cost ways t promote m w to music. McBri and his partners were ready to put what they had learned ab ide p t bout digital m music marketi to ing work in a vehicle that could attr t ract investors s. Ini itial response from invest e tors was mixe however. “Returns on entertainme products when ed, n ent portfo olios are smal are typicall very erratic said one N ll ly c”, New York-bas venture c sed capitalist.2 Wa the as non m major label ap pproach about to fail again? t

The Music Ind dustry
Th music indu he ustry compris a wary a sed alliance betwe art and b een business. Artists,