Choosing a label in the new era of the music industry
Olivia Callaghan on October 17, 2017
In the music industry there are constantly so many things to consider. One of the biggest being, how do you know which label to choose?
For years in the music industry, landing a record deal has been the intention for pretty much every musician and rightfully so, the aim of making music is to have it well produced, distributed and sold.
A deal is the golden ticket, right? No more itching to buy studio recording time, no hassle with the distribution of music and merchandise, getting your music out there to the right audience, booking shows and tours now you don’t have to worry as it’s all under control by your big brother-esque figure – your record label.
Whether you’re a new up and coming artist or you’re in the game a while itching to get the right deal, signing with a label, whether major or indie, is a huge decision and an even greater risk as the lines are beginning to blur between major and indie labels.
Major labels are synonymous for ‘buying-out’ smaller labels, and equity deals at the forefront of most label arrangements. The music business landscape has seen a rise in major labels taking ownership over a large sum of subsidiary smaller record labels, leaving artists to wonder, who they are even signing with.
The 21st century has seen the rise and fall of various record labels, however, the ‘Big Three’ (Warner, Sony and Universal) are dominating the industry. (The ‘Big Four’ until 2011 when EMI sold their recorded music operations to UMG for 1.9billion and music publishing operations to Sony for 2.2 billion). In 2016, data released by WIN, the independent label group, released startling figures. The Big three contributed to two third’s of the music market in both the US and the UK, which would incline any artist to sign with a major label.
The key role of a record label is to produce and sell records for an artist. However, in recent years, major labels have become an all-encompassing entity which covers every angle of the production – from artist development and promotion to marketing and publicity, all you have do is make the music. The catch? You have to make the music the way they want you to. Huge teams in A&R, publishing and licensing, legal teams, sales, art and graphic design, control every aspect of the situation from beginning to the end of the production conveyor belt. However, this full-scale service comes at a price – major labels taking huge percentages of sales profits, merchandise, royalties and even merch.
And how they coax artists in? Why money of course! Huge figures and fixed capital is pumped into at early stages of record deal/production enticing artists to sign immediately.
Major labels see product and profit as the two main objectives to sign and create a record deal with an artist. This rose-tainted ideology draws artists in at the early stages with little or no info about what’s involved.
In stark contrast to this, indie labels usually don’t offer huge capitol nor huge teams focused on making product, and making it fast. Most acts begin their musical careers within an indie label, giving indies the edge of taking the risk on the up and coming acts, which major labels tend to avoid. Indies are committed to the art of music and not just the business model.
Indie labels are artist friendly and are acknowledged for creating fairer deals, offering more authority and liberty to the artist. Despite this, as funding may not be as large, artists may feel they suffer at the hands of the indie labels, missing out on opportunities etc.
The central question in choosing between a major and indie label lies upon what the desired outcome, and how much say the artist wants over their career.
1. Choosing the label
Whether they choose you or you choose them it’s important to know what the label represents? Is it a large scale corporate business which represents thousands of acts across the board or is it genre specific, offering time, energy and insight into an acquired field?
What other acts are on the label and how can their success rate in the music industry be measured since signing with the label? This should be a pretty good indicator of what prospects lies within any label.
Also, consider how the label ‘grooms’ their artist. Are they there to support and are guidance methods in place or is there an artist development programme which would make a puppet of you under their guidelines.
2. The Deal
What’s laid out in the deal determines the future so it’s necessary an artist has their say.
Major labels tend to have a template laid out which offers little or no room for change. A deal is generally set out on their terms, which may or may not benefit an up and coming artist who doesn’t really know much about the industry, their direction or their to-be product. Record deals usually operate year to year, however some major labels may tie you to their accounts for more than a year at a time, something to watch for.
An indie label on the other hand will be more lenient with their terms, generally offering what they believe to be best for the artist. Indie labels usually opt to offer rights and ownership to content to the artist (hat tip to them!) This offers artists the freedom to control and outsource their own product, which is widely ignored within major labels.
David Byrne in ‘How Music Works’ details the various deals within the industry from the 360 deal to licensing deals. Artists should always be very aware of their options before committing to anything.
Where advantage lies for a major label, a disadvantage arises for the indie label, and vice versa. Issues like capital, a guarantee from the outset with a major label, give major labels the edge over indies so to say.
Indie labels have smaller budgets and lack of funding commonly result in numerous cut-backs, in recording, production, distribution, press, tour, merch etc. where major labels, are able to have huge teams in A&R, publishing, licensing, legal affairs, publicity, promotion, sales, art and graphic design. Greater funding and endless capital results in higher quality production, better publicity tours, branding, distribution, merch, you name it.
Nevertheless, indie labels bite back offering artists more control over how and where money is spent, how percentages are divided, and fairer royalty and streaming structures are in place.
When major labels, who operate in a larger scale business like manner the deal is done on their terms as they tend to dictate percentage splits as they are essentially indebted from the outset.
Important to know that major labels operate in business terms and deal with quick turnover which could mean if certain sales quotas and standards are not met, the artist could find themselves choosing your next career move before you know it. Although there can be less control at a major label, it is also important to remember that due to limited budgets at indie labels, the label can go under easier. Therefore, it leaves you without a label and with more to think about in the long term scheme of things.
Developing strong relationships with people in the music industry is vital, whether it be an indie or major label.
Within larger labels the artist may struggle to create strong and trusted relationships as they will be dealing with various teams and in some case not even meeting members of their team.
Indie labels generally function on a smaller scale which makes it easier to build relationships with more trust and they will have opportunities to co-ordinate with other artists on the label.
Major labels do, however, have various relationships with all aspects of the industry which they will push for you to co-ordinate with. Indie labels in this sense may fall short.
During the 20th century, record labels dominated the industry stating they could make or break an artist. In light of all said, and in the words of Bob Dylan, “Time’s they are a changin” and changing they are. Post 20th century, artists are less dependant on record labels and are finding themselves and their career focused on social media and various streaming platforms.
Streaming and downloads, the nucleus of income for the music industry. It’s no secret that less money being made by record sales, however the rebirth of vinyl has seen a rise in physical sales across the board. In an age where artists have the ability to record and produce their own material, the ability to self-publish, in an attempt to gain control over their work, it’s a wonder they want to sign at all.
While there are many pro’s and con’s to signing with either indie and major labels, the most important factor to consider is what you want from your career.
Major labels can offer money, tours and travel but, you may risk your creative control while working with them, at least in the beginning. While indie labels may not offer these opportunities upfront, it’s not to say won’t happen, you may simply have to put more out in the beginning and you will have a lot more control over the type of music you make.
Either way it’s both hard work, it all starts with the artist building a fanbase in other to get noticed by record companies. Self-promotion through social media is the best place to start because without a fan base no label (major or indie) will see opportunity for investment.
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