The labels still have one very vital function - marketing. While it's true there are great musicians out there who are also marketing geniuses, most of them aren't. There is always going to be a number of people involved in helping a musician's career. You can call that group whatever you want. Right now it's called a "label".
I'm not suggesting that Steve Albini is suddenly going to become a merchandising genius, only that Warner Music can't monopolize music marketing talent. Small firms will have a hard time getting a foothold in retail music, but as retail music starts to matter less, more small firms will enter the market to start bidding down the price of "marketing" and "promotion".
