Record labels. What are they? Why do we need them? What types are there? How can they help us? Or are they just the devil for all you musicians out there? During this blog post I will hopefully be able to answer those questions for you, so that you can make an informed decision about whether they are the way to go.
Record labels are split into two categories, major and indie. There are 3 major record labels; ‘Warner Music Group’, ‘Universal Music Group’ and ‘Sony Music’. We’ll examine these closer in a bit. An indie record label is any label that has no affiliation to these big 3. For clarification, it has nothing to do with indie music, it just means independent. For example ‘Hopeless Records’ are a big indie record label associated with pop punk music and ‘Warp Records’ specializes in EDM (electronic dance music). The 3 major labels do have many offshoots such as ‘Interscope’, ‘Island’, and ‘Geffen’ records but it’s important to remember that a label is only indie if it is completely independent from the big 3.
Within a record label there are many key roles. Obviously, the focus on these roles varies between major and indie and we will examine this further later on. The key roles include; CEO, President, A&R Department, Product Manager, Business Affairs, Lawyers, Sales Team, PR, Radio Plugger, Marketing Manager and International Department. So as you can see, it takes a lot of people to keep the music business lucrative. In fact, it’s estimated that ‘Universal Music Group’ employs around 7000 people. Each of these roles is important but each has very different responsibilities. For example, the lawyers and business affairs team are there to keep an eye on the business side. It is the music business after all. It’s their job to monitor contracts and see that the company and its artist are getting the best deals. The team that deals most closely with the artist is the A&R team. A&R stands for artists and repertoire and their team may include scouts, assistants and a head of department. It is the role of the A&R team to liaise with the artists. They oversee the creative process of making and marketing a record and can even be there to help guide the artist through. The A&R team also scouts new talent and sometimes puts their job on the line over recommendations of who should be signed.
Once an artist has completed a record, and it's time for release, there are many crucial jobs within a label to make sure the sales come pouring in. These include product, sales, marketing and PR departments and radio pluggers. The product department is responsible for booking the pressing plants to manufacture the physical product and coordinating artwork. The marketing team is employed to look after promotional activity and the sales department is in charge of selling the product to different retailers. Usually, that would mean various shops but nowadays there are many more outlet streams for people to absorb music, so it's key for people in the sales department to exploit this. The PR department manages the artist’s relationship with the wider media including newspapers, magazines, websites and blogs. A radio or TV plugger has a similar role to a PR person, except that they deal with media specifically in radio and TV and try to get coverage for the artist in those media. It’s important for these departments to have good contacts.
What are the differences between major and indie labels? As I’m sure you might have guessed, the main difference between the two is funding. This, therefore, means it’s practically impossible for an indie label to employ enough people for each of the roles we’ve spoken about above. For example, the CEO of ‘Warner Music Group’ Stephen Cooper, who alone makes nearly 5 million dollars a year, is heavily involved in the financial side of running the label but doesn’t spend a great deal of time with the artists and will delegate that to the A&R team. At an indie label there may only be a few members in an A&R department and it is quite common for artists to be in regular contact with the CEO and managing directors. The difference in size of these corporations means that at an indie label some roles may be encapsulated by a couple of people. For example, one or two people might be running PR, radio plugging and marketing. This lack of funds can also mean that sometimes indie labels aren’t able to take an artist to the next step if they become successful. For example, when ‘Adele’ released the album ‘21’ she was signed to indie record label ‘XL Recordings’ but in order for the PR, marketing, plugging, sales and international department to match the success of the album she had to sign with ‘Beggars Group’ (owned by Sony) to take full advantage of the records success. It is for these connections and reputation that the major labels control 80% of the music industry.
So, if major labels have it all why would you want to go with an indie? Well I, like I’m sure most of you, initially couldn’t see the appeal of an indie label. After all, ‘Ed Sheeran’, ‘Taylor Swift’, ‘Green Day’, ‘Eminem’, ‘Avicii’, ‘One Direction’, ‘Beyonce’, ‘Rihanna’ etc are all signed to major labels. However, they have some extremely positive aspects that make them quite an attractive prospect. Due to the limited finance, they choose the acts they represent carefully and, as we mentioned earlier, indie labels tend to specialize in certain types of music. This means they have a personal affiliation with their acts and are passionate about seeing them succeed. Major labels such as ‘Universal’ have acts as vast as ‘Metallica’ and ‘Lil Wayne’. Indie labels are able to give the time and attention to artists that majors can’t and often a strong relationship is built up with many acts staying with the same label for their entire career. For example, British rock band ‘Arctic Monkeys’ were signed by indie record label ‘Domino’ in 2005. With the labels help, the bands first album ‘Whatever People Say I Am, That’s What I’m Not’ became the fastest selling debut album in British music history. Since then the band have produced another 4 massive albums with the same label and have had hits worldwide. Other artists who have had successful careers with indie labels are ‘Franz Ferdinand’, ‘The Prodigy’, ‘Depeche Mode’, ‘Madness’, ‘The Libertines’, ‘The Smiths’, ‘Motorhead’ and ‘Dizzee Rascal’.
Another difference between major and indie record labels is the contracts they offer. The word contract can strike fear into most upcoming musicians so it’s crucial to know what to expect from them. It’s true that many artists such as ‘Florence and the Machine’, ‘Kesha’ and ‘30 Second to Mars’ have got into contract difficulties. At a major record label you will usually be given something called an advance. This is basically a wage paid to you to live and can be many thousands. It is typical at a major label for them to choose the producer working on the album, what songs will be on the record and be jointly responsible over the artistic control. They have a major reputation to uphold and will only release music they believe will be a success. Many artists have been signed to major labels and dropped without music ever being released. In most of their contracts they will own the music you make with them, so remember, if a major drops you they still own your music. In order to make their money back as well they tend to take around 85% of the royalties made. We will look at royalties in greater detail in another blog. However, it is not all doom and gloom. It’s important to remember that with one of these three names behind you many stars have reached worldwide acclaim. These companies have incredible contacts, wealth and talent that can propel your career.
Indie label contracts are slightly different to major’s. The advance they give is obviously nowhere near as much but as a musician you have more artistic control. As we said earlier, these companies work closely with the artist and you will have a say in both how the album is recorded and marketed. As the advance is less, and the label has less to recoup, you are also more likely to receive higher royalties. In the case of moving on from an indie label it is very common for artists to keep the entitlement to all their work. Indie record labels are also much easier to negotiate with at the contract stage whereas there are many lawyers to debate with at a major record label.
So why should you want a record label at all? You could form your own, plenty have. It’s about finding one that works for you, where you don’t feel taken advantage of and that will help you get to where you want to be. For me personally I’m aiming for an indie label such as ‘Hopeless’ or ‘Cooking Vinyl’ as the work they do suits me as a musician. But every artist has different needs and every person in the industry is looking for something different out of it. So in order to take full advantage of the opportunities a record labels can offer you, it’s vital to research the one that suits your needs best.
For all things music check out my website Eliot Ash
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