Does the old business model of Record labels still work?

Tate Music Group is debt free! Those are the best 6 words any artist could ever hear about their record label. Debt free means TMG is FREE in a sense. We are not tied to a line of credit and nobody controls us because they have lent us money. I once heard "those that control debt control everything". Pretty scary considering government actions over the last several years, but that is a different topic all together.

British private equity group Terra Firma wants to bring in outside investors to help EMI which is struggling with $4.2 Billion of debt. If you don't recall Citigroup Inc. bankrolled the buyout of EMI in 2007. There are fears now that EMI could default on interest payments to Citigroup, Inc (www.billboard.biz). Not only are they billions of dollars in debt but there are fears that EMI can't even make interest payments on their debt. Pretty scary considering EMI's status in the music industry.

In most of my blogs I talk about how TMG is reinventing the music label business model. TMG wants to partner with the artist, where other labels want to find one breakthrough artist and sign them to a 360 deal. The business model of other labels does not allow them to develop talent. I've spoken to a few artist signed to major deals only to be dumped after a month. Tate Music Group allows artist to develop their talent and honestly take advantage of the "Snowball" affect. Generally we start locally, grow regionally before the artist hits nationally. TMG is proving this model works every day we stay debt free and our artists make money!