A while ago, labels realized that if they were investing a lot into a band on things like art, tour support, promotions and marketing, it was silly when other third party companies made the money, often with worse splits with the band.
360 or all-rights deals mean that the label helps with all aspects of the band from Fanclub to touring and publishing, and splits profits, usually 50/50 on all but recorded music (which has different splits)
So basically the band an label are in a agency/client model. This is great if the label can deliver on the promise of the deal. That is why I was brought into a label, for in house tech. Not happening as much right now but that can change.
This is a similar way CAA and William Morris work. Shared risk/reward and if done properly on both sides can leads to more incremental gains earlier and with less upfront spending.
So essentially you are saying that the major labels are the tip-of-the-iceberg in terms of how the money circulates?
Owning a major label wouldn't really get Google that much since it wouldn't allow it to change the business model since that is dictated by multiple interlocked contracts between different players, including of course, the artists.
Google should not buy a label or a music company. It wouldn't make sense at all. The friction going on right now is because Google views music as something that the labels don't. They view it as data that makes their device better. The music industry views it as intellectual property.
I side with Google on this, depending on WHAT Google wants to do with the data. If they are common carrier, locker in the sky. Great. But as soon as they use it as a means of advertising/marketing (a la Youtube) they are stepping into waters that the RIAA has nothing to do with. It's just normal, silly US copyright law and the contracts that our heroes the artists signed.
On the other side, imagine if the labels went to Google and demanded all their source code so they could setup their own internal Google and make them some money that way, to add value to their technology. Just as silly.
The other thing: don't conflate the "Music industry" with the big 4. They are not one and the same. The Music Industry is a HUGE thing that uses and represents the most long lasting of culture artifacts in terms of marketability. It includes Spotify, Soundcloud, Songkick, Hypemachine, Big Champagne, CrowdSurge, Apple, Google (through YouTube right now), Amazon, etc. Then the management companies: The Firm, The Collective, QPrime, Red Light. A vast space.
Some operate on the infrastructure level, some license content, some fill voids and some you've never heard of.
That being said, the future of the music INDUSTRY is the disintermediation of the big 4 by means of a restructuring of what they do. Artists don't need them if they don't want them, and certainly the companies that make up the industry know this (see Fanbridge, TopSpin, etc).
The industry in the last two years has diversified substantially. The real power is transferring to management companies, startups, distribution, artist services, open-source technology and API based business development.
What will happen to the big 4, and starting with 2 (WMG and EMI) is new owners, and hopefully an entrepreneurial sensibility informing their restructuring. They need to be nimble, technology forward, representing their artists using technology and manning up when it comes to the value of their content (because there is value, and "free" is value if done correctly).
Anyhow, blog posts for another day.