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Over the years, the U.S. recording industry has experienced dramatic shifts in its power structure. From the 1950s through the 1980s, the industry consisted of numerous competing major labels as well as independent production houses, or indies. Over time, the major labels began swallowing up the indies and then buying each other. By 1998, only six big labels remained: Universal, Warner, Sony, BMG, EMI, and Polygram. That year, Universal acquired Polygram; in 2003 BMG and Sony merged; and in late 2011, EMI was auctioned off to Universal. Today, only three major music corporations exist: Sony BMG Music Entertainment, Universal Music Group, and Warner Music Group. Together, these firms control more than 85 percent of the recording industry in the United States. Critics, consumers, and artists alike complain that this consolidation of power in the hands of a few resists new sounds in music that may not have traditional commercial appeal and supports only those major artists and sounds that have large mainstream appeal.

Still, about five thousand U.S. indies (some large, some small) have managed to survive. For example, Fat Wreck Chords, a punk label, and Merge Records, an indie rock label with recent Album of the Year Grammy winners Arcade Fire as well as smaller bands like She & Him, the Mountain Goats, and Spoon, continue to provide outlets for new music and nonmainstream sounds. These companies record less commercially viable music, established older artists now ignored by the major labels, or music they hope will become profitable. Many indies also reissue forgotten artists and record new innovative performers. They thus play a major role as the industry’s risk-takers, since major labels are reluctant to invest in forgotten or commercially unproven artists. Producing 12 to 15 percent of America’s music in a typical year, indies often ink deals with majors to gain wider distribution for their artists.

Indies tend to struggle financially, and many have turned to the Internet as a tool for lowering their costs. Through personal Web sites and social-networking sites like Facebook and MySpace, indies sell recordings and merchandise, list tour schedules, and provide other promotional information about their company’s offerings. Bands that previously would have had no choice but to sign with a major label now have another path to success, thanks to the Internet and other independent alternatives.