Big Music can no longer afford talent
Music industry commentators seem to be fond of saying that there is no longer a viable talent pool from which they can draw to groom the next hot act. A "creative drought" supposedly prevents the labels from signing artists whom the public will willingly embrace. Yes, it's all the fault of the no-talent artists. Or maybe we're finally paying the price for the curtailment of music education in public schools.
A creative drought?! Perhaps from the perspective of the majors. But try to see it from the other side: The majors can not afford to promote an act that they don't think will sell (I'm guessing) 50,000 to 100,000 units - minimum. That'd probably be a failure from their perspective. The overhead costs of the majors are staggering - all those lawyers and A&R guys and PR flaks and "name" producers... Not to mention the real estate and capital equipment costs. It takes a lot of sales to cover all that overhead, even despite the fact that a recording contract doesn't pay squat to the typical signed artist.
Compare that with the artist on an indie label, or even the self-produced artist. They run lean because they couldn't survive any other way. There are (again, I'm guessing) tens of thousands of artists selling CDs at $5 to $15 per pop and pocketing most of that money for themselves instead of the pittance they'd get as part of a label contract (after they recouped the over-inflated production and promotion expenses, if ever).
If you have a local music scene, check it out. Or spend some time surfing YouTube or MySpace for unfamiliar and unknown artists. There's a ton of talent out there. Something for every taste. Not all of it is "world class", whatever the heck that really means in terms of art, but there sure as heck is something for everyone. That's a lot more than you can say for what "big music" is offering.
And that's the problem big music faces: The real talent that's already out there doesn't want to have anything to do with a label contract. Think about it: Would you rather take a shot a selling your own CDs and getting $4 or more for every one that sells, or put your fate in the hands of a label and hope that they don't tie you up for the duration of your contract with - in the most likely case - less income than you could drum up on your own and a contractual restriction against trying any different approach to get your music out to your audience. (A recording contract obligates the artist to not only cover all the expenses of producing and promoting their record, but also gives the label total control over how they spend the money that'll be paid from the sales of the music.)
There's no creative drought. The talent simply knows better than to get into bed with the majors. This is why the majors have been reduced to producing and promoting manufactured acts.