Competition is good and the web is also great but I think too many indie labels pollutes the market with crap and eventually indie labels will be known for selling crap records, gimmicky records, or weird artists not because they're good but just for the sake of weirdness and novelty.
I also think the Internet is overhyped in terms of letting indie artists get heard. It makes a great news story but it's still incredibly rare, possibly even rarer than getting major label contract.
I'd say more competition at high levels is good, there's too much at the smaller level, and the web makes it easy for any schmuck to release music no one cares about. There has to be a better way!
When I was younger I used to be one of the schmucks releasing music no one cared about online so I'm allowed to say that haha.
Why are you assuming small labels want to grow bigger? Many indie labels are owned by or have contracts with larger labels to provide wider avenues of distribution. Alongside with those, there are plenty of small labels and small artists, verging on your "schmucks" definition, that are perfectly content with their sales and the size of the fan base they have.
These are small artists and small labels who often record music because they love to do it, and they chose to do it in whatever way is most comfortable for them. Not everyone in the music industry is in it for the profit.
I also think the Internet is overhyped in terms of letting indie artists get heard. It makes a great news story but it's still incredibly rare, possibly even rarer than getting major label contract.
I'd say more competition at high levels is good, there's too much at the smaller level, and the web makes it easy for any schmuck to release music no one cares about. There has to be a better way!
When I was younger I used to be one of the schmucks releasing music no one cared about online so I'm allowed to say that haha.