I heard a fascinating interview with OK Go's lead singer Damian Kulash on NPR yesterday. The jist of the interview was that the old world of major record labels picking and promoting new artists is dying. In that model, labels would send A&R people out to find new acts. The label would then sign a bunch of acts with the notion, says Kulash, that one out of 20 would make it big -- the profits from the successful act would subsidize the capital spent on the 19 unsuccessful ones.
Today, however, you don't necessarily need a record label or a recording studio to make decent music. This can be done at home with some instruments and a personal computer, and maybe a camera to make a video. So some artists are trying to work around the labels. And, indeed, OK Go has done quite well for itself without a label's backing largely building on the buzz created by their free videos (see here for their brilliant Rube Goldberg one).
Now, I don't know how accurate this narrative is. (It may be a lot like candidate nominations -- there's a popular belief that with the demise of party machines, regular people have a shot at office and don't need the party bosses anymore, but this is largely untrue.) But to the extent it is, it strikes me as not necessarily all that liberating for struggling musicians out there.
Under the old system, A&R people could actually pluck artists from obscurity and give them the backing they needed to be heard. With the labels out of the picture, theoretically no one is selected out of the system, but it's a lot harder to break into the upper levels. Maybe you really don't need the label to provide you with equipment and studio time any more, but not every band or artist can afford to tour, which is pretty vital to building a career in music. This means that wealthier bands have a bigger advantage than they used to.
Besides, if the old model meant that 5% of supported bands made it, what's that percentage now with basically every kid with a guitar and a Mac in the denominator? Yes, some bands figure a way to make themselves heard, but a lot more fall by the wayside. This strikes me as one of those societal changes that sounds more "democratic" but really means that more people are free to fail.