When asked about the future newsroom, Axel Springer CEO Mathias Döpfner was blunt: “My role model is more like a record label.”

I interviewed Döpfner in Berlin last year during Axel Springer’s Paid Content Summit in front of executives of Bild, Welt, and dozens of other newsrooms from around the world.

“You attract the best talent, you attract the best creators, and you create the best artists,” Döpfner envisioned. 

“And you create an environment where they feel well treated, where they see opportunities that they don’t have on a standalone basis.”

Why would any creator join a legacy media firm instead of going independent?

What record labels do

Similarly to other media sectors, the Internet changed the way people create, distribute, and enjoy music. 

Technology platforms such as Spotify or YouTube democratised access to audiences and lowered cost of content production, distribution, promotion, and sales. This helped creators gain more autonomy and new opportunities to form relationships with audiences and to monetise them. 

However, this freedom requires them to shoulder increased risks, responsibilities, and administrative burdens traditionally absorbed by media firms.

In the music industry, record labels: 

• Discover talent, educate, and plan their careers.

• Negotiate and manage contracts and licenses.

• Cover the cost of content production and marketing.

• Coordinate distribution, promotion, sales, and publicity.

Banks for content renaissance

Of all the jobs of record labels, early funding is perhaps the most important.

“Record companies play a capital allocation role,” explained Alex Connock in Media Management and Artificial Intelligence (Routledge, 2022). 

“They aim to earn returns through their ability to select which talent and material to invest in, and bring that to market based on their long-term understanding of both demand and talent.”

In Rolling Stone magazine, Milan Kordestani compared record labels to Roman Catholic popes and other wealthy patrons commissioning art from Michelangelo or Raphael during the Italian Renaissance. 

In modern times, Amazon paid YouTuber Mr Beast about US$100 million to produce the first season of Beast Games, one of the most expensive deals in the history of reality TV.

Other deals followed, and Netflix debuted a children show by another popular YouTuber, Ms. Rachel. 

In interviews, CEO Ted Sarandos called YouTube and TikTok “training grounds” for creators and suggested they will ultimately come to Netflix to make real money.

So why would any creator join a legacy media firm instead of staying independent? What about an advance?

Greg’s Readers First newsletter is a public face of a revenue and media subscriptions initiative by INMA, outlined here. INMA members can subscribe here.

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