Why don't artists just distribute their music themselves? I've never understood why artists always signed with labels. Is it the prestige? Is it the credibility that comes with being signed, or is it somewhat like venture capital? Surely the internet has made this somewhat easier...
It's more than that. A label takes care marketing, sales, and other things in order to free the artist up for art. Selling music and film, esp. through the normal channels, is a complicated process, and it's a lot easier with a label to do it for you.
Music seems like it could sell itself. Personally I don't really care about the artist behind it (unless she's attractive) so long as the music sounds good. So maybe the record companies make artists attractive looking? Is that what marketing is?
Music doesn't get heard unless you tell people about it. At it's most basic level, that's what marketing is. Of course it can and often is much more sophisticated or manipulative, but that's the core of it.
So if you have music you want people to hear, you need to get it on the radio, get it played in clubs, have it reviewed etc. Most people don't _hunt_ for music, they find what they like passively. So if you want more ears, you have to work to get the music in front of them.
That takes expertise and time. Artists don't necessarily have either -- not if they're giving the music the time it deserves.
Hence labels. They understand marketing, have money to pay for studio time, handle the technical details -- engineering, mastering -- and have the distribution channels.
I don't know if I'd go that far, but I will say that the absolute best performing advertisements are for competitors. Thankfully, my free competitors have mostly not figured this out yet, and think that their yearly AdSense check is webmaster welfare instead of an indication that charging money is working for somebody.