The term record "label" is an interesting anachronism, pointing back to the label on a physical record. We'll see how long it lasts as a business category. As

The term record "label" is an interesting anachronism, pointing back to the label on a physical record. We'll see how long it lasts as a business category. As others have pointed out, labels are far more than a middleman. To market music as a product requires just as much business infrastructure as any other modern media. Which is to say a lot! In addition, a major label will front the money for the project, with budgets in the hundreds of thousands to millions of dollars. Since most of their acts come nowhere near recouping, the contracts are structured aggressively in the label's favor. They hope to cover all the production and marketing costs of all their acts from the few that make money (hits). One problem for both fans and musicians is discovery. It's trivial to make your music available to anyone in the world, whereas it used to take a huge capital investment to get product distributed. On the other hand, the marketing and production costs haven't significantly changed. Getting a significant amount of people to discover and like your music is a daunting project for any entity, large or small. On occasion a viral hit breaks through, but the acts that represent the bulk of economic activity are actively created and pushed by pros. Spotify is providing the most promising alternative distribution system I've seen yet. But they are more of a hybrid between radio and a store. They don't provide anything to the creation or marketing of artists.