The opening panel at the South by Southwest music conference in Austin, Texas, today (March 14) saw such indie label execs as Matador Records co-owner Gerard Cosloy and New West founder Cameron Strang debating potential new models for indie labels in the face of increasing digital downloads. The discussion, entitled "A Field Guide To Indie Labels," also featured such execs as Robb Nansel from Saddle Creek and Glenn Dicker, head of Redeye Distribution/Yep Roc Records.

The discussion got heated when an attendee asked if labels are looking to take a cut of an artist's touring revenue in the hope of replacing profits lost by a decrease in CD sales. Strang said New West was
investigating such models. "The digital thing hurts our business," he said. "It doesn't hurt the music business, but it hurts the record business."

He added that the question he's struggling with is how to shift from "being a record company to being a music company." Seeing labels ask for a cut of an artist's touring profits, or more aggressively pursue licencing and merchandising opportunities for its acts, could be a
possibility.

Yet Matador's Cosloy noted that asking for a cut of an artist's touring revenue could "open a can of worms." He said that creates a scenario where albums exists primarily to promote tours, and he feared that tour promoters would then start putting out their own albums.

Instead, Cosloy said Matador was viewing the digital era as "a challenge," and looking to "create a scenario where people are excited about buying music," be it physical or digital. He said the label is is investigating ways to offer more value with each CD purchase.

Earlier, the discussion centered largely on the varying business models of the labels in attendance. Despite the fact that more than 1,500 bands will be performing over the course of the next four nights, and acts like the Shins and Arcade Fire are debuting in the top of The Billboard 200, every label on the panel said they were more conservative than ever in their signing practices.

Cosloy said Matador no longer goes on a "signing spree," and instead looks to get to know its artists before striking a deal. Nansel at Saddle Creek joked that "we don't really sign bands. It's on our radar as something we should maybe start thinking about."

Plenty of artists in the room heard those words as an excuse to immediately approach Nansel after the panel with a CD in hand. Indeed, even with some execs expressing concerns about the future of the "record business," there's no shortage of artists willing to sign up.


For full coverage, news and analysis from the 2007 South By Southwest Music Conference, visit Billboard.biz/sxsw.