Elias Bizannes, vice-chair of the DataPortability project, is currently over in the states for the South by Southwest 2009 music / film conference.

He wrote on his Blog yesterday some insight into the music industry he received whilst in a pub, when coming across:

“…one of the more influential people in the music industry.”

They discussed future business models and where they saw the future of the industry going.

Bizannes told readers:

“The record label model is actually going to work,”

“What’s happening is a change, and the crisis the industry has faced is actually a good thing, because its forced them to rethink and renegotiate their value proposition.”

He compared the music industry with Venture Capitalists, saying:

“Record labels have realised that the value they provide to artists is that of a talent management agency,”

“In fact, an almost complete parallel can be made with the venture capital industry.”

I think he hit the nail on the head, without the music industry a star may not make it big, though with huge amounts of cash injected into them it gives them the potential to.

“Overnight, they can make a new star by giving them exposure to foreign markets, the capital they need to record music and distribute it to the masses, and all the other costs that are needed to become a big star. In return, rather than deriving 90% of their revenue from CD sales as record labels used to, they instead ask to get a 50% stake in the artist.”

Though, there are artists out there that are going it alone, but rarely do we see one that succeeds, and ones that do (like Radiohead) have already gone through their fame of getting an audience to sell their music to.

A lot of people are also saying that artists make enough from merchandise and concerts, and this is true according to Bizannes, though:

“…this company [the record label he was speaking to] makes several billion dollars a year on music sales still, of which 75% are due to CD sales (and just the fact they make 25% in digital amazes me in itself).”

It’ll be interesting to see what angle all the music labels take, and if they’ll start adopting different models any time soon, of which some already are.

Will we start to see content being offered for free? Artists giving away their first single? Who knows, but Elias says it’s still strong.