Alan McGee: Why I'm giving up my label

With a little money, the internet and some live gigs, new acts can be successful - without the big record companies. In fact, it's the end of the road for the majors, says Alan McGee.

The last 10 years have seen big changes in the music industry that have turned it on its head. Throughout the Eighties there were 12 major labels and between 20 and 30 reputable indies that you'd consider using. The switch to digital has meant that now, as soon as a record goes to promo, it's on the internet for anyone to take six weeks before its official release.

So now there are just three surviving major labels, all of which are going to have to stop kidding themselves that they will develop into multimedia entertainment companies that can manage bands and share in live income. This could happen in as little as two years' time. The accountants at these big labels are eventually going to work out that they need to stop spending millions on signing new bands, and drop all but the biggest acts. It isn't easy to get a superstar and labels are trying to get lucky with new bands, when the reality is that it can be a total lottery. When they do work out that the new band business isn't for them, they will sack 90 per cent of their staff, make a fortune from being back-catalogue suppliers and, having made huge profits, make the shareholders happy by selling for billions.

A shift like this is going to leave more and more power with the bands, alongside the developing multimedia operators. There are bands now who are selling out big venues and having chart success on a level that they would no where near have been able to achieve a decade ago - all without the help of majors, and often with no label at all. With the losses in CD sales through burning, playing live is more important than ever and it's possible to make a decent income doing this.

The great thing is that you can't replicate a live show - which is good for the fans, artists and managers - and you can make a lot of money. The majors know this and are trying to get in on bands' live incomes. But why should an established band with the popularity of Radiohead or Oasis give a label 50 per cent of their income? Why even give them 1 per cent? These are already massive live bands. Now, when three million sales is what classifies a hit - compared with the 20 million that Alanis Morissette and Oasis would sell 10 years ago - it's inevitable the power is going to lie with bands promoting themselves. I believe a great deal in MySpace's power - we've seen Koopa and Enter Shikari break this year through creating fanbases on the website - and the number of people it gives you access to without spending anything on marketing. It's about owning your own copyright, and maintaining it, which is where bands like The Sessions are getting ahead.

The story of how I met The Sessions is simple and, not surprisingly, it was online, through MySpace, after the front man, Taz Allie, messaged me. They caught my attention the first time I saw them and I couldn't believe that they weren't doing more, in terms of playing live and promoting themselves.

I started to put them on more and more at my London clubs, Death Disco, The Queen is Dead and Now We're Off To Rehab. It was through my clubs that I became mates with them and now I DJ with Taz, too. That's when the labels came knocking, offering them all these record deals.

It wasn't long before I told them that they could do all these supposedly great things being offered to them themselves. When Taz worked out what he could do with a bank loan, I offered to advise him. I'm not their manager but once I got talking to Taz, he was so genuine and sincere I offered to help as a friend.

You have to respect them for taking out a loan and putting their balls on the line. They deserve every bit of good press they get. They're all ordinary guys - the drummer is a window cleaner - and I like them because their expectation of the music business is zero. They have been on the go for three or four years, but I think that because they aren't an obvious band they fell on deaf ears for a while and no one seemed to care. Since they have started playing at my clubs they're becoming increasingly popular.

In terms of what's happened with their single, "What Is This Feeling?", I offered to try to get it into a couple of films in order to pay for it, as synchs are a good way to make money. They then took out the loan, made the video for a grand and went about pressing 500 singles, and it's barely costing them anything. Following that, Cherrystones came in to remix the track as a favour and the end result is world class.

The Sessions' version is great, being influenced by The Charlatans, Primal Scream, Happy Mondays (and they remind me of Curtis Mayfield doing Sweet Exorcist in 1974), but how Cherrystones have reworked it with Taz's song writing is amazing. The media are going to be all over it. So with no major, and some balls, The Sessions are going to show everyone how it's done.

As sources of new talent, the majors are still delusional about the future. Due to the high risk involved in breaking a new band, they have become more conservative and, because they haven't embraced the technology that's changed the business as much as the bands have, they are being shut out.

The only thing a major has over an independent is money. Nowadays, creating a dedicated fanbase is what is most important for bands, and they do this by playing live and getting an online following. I book new acts for my clubs through MySpace because it's a good way to get in contact with thousands of bands.

When major labels start promoting a new act they are short-sighted; they want immediate hits. This is what is destroying them, that and the fact that they never loved music enough.

I am running down my label, Poptones, as I don't believe in owning a record company any more - bands should own their own copyrights.Looking to the future, as the majors decline, more bands will recognise that it's the real music-lovers who will help them succeed - the management, the live agents and the sponsors.

The majors should have paid more attention to what was happening in the music industry and sorted out their business model. They didn't, and now it is killing them.

The Sessions release 'What Is This Feeling' on 18 June through P&C Indio Records