Before the dawn of digital downloads, the names of record labels sat snugly in the center of vinyl records. But exactly what do record labels do, and do artists really need to sign with one?
How Does a Record Label Work?
Record deal, recording contract, label deal. Whatever you call it, signing a record label is considered a massive step in an artist’s career.
Record labels are businesses that primarily market recorded music and music videos. They supply artists with the funds they need to record an album, and the artists pay them back with the earnings from the record. But they also offer artists additional industry perks, including:
- A&R (Artists and Repertoire or new artist recruitment and development)
- Exposure and Promotion
- Specialist Support
- Distribution and Distribution Deals
- Licensing Deals
Major vs. Independent Labels
Major record labels are your household names in the industry, and they represent a variety of successful artists. Companies such as Sony Music, Universal Music Group, and more sign artists to exclusive contracts that allow the label to send their music out through their distribution network and into the ears of fans.
Major record labels generally own subsidiaries specializing in different genres, much like Capitol Records is now owned by Universal Music Group. These labels often take a larger cut of their artist’s earnings, and in turn, provide a wide range of agreements.
On the other hand, independent record labels—often called indie labels—have significantly less funding. These labels generally represent up-and-coming artists and help them gain traction in the industry. Indie labels don’t have the backing of corporations.
Although indie labels don’t have as large of a reach as major labels, they’re thought to have a better sense of the trends in music and often pick up artists who become famous.
The Purpose of Record Labels
With the development of digital recording software, musicians are able to track projects in their living rooms with a single laptop.
Since musicians have greater access to recording software and means of distributing their own music, record labels have to work that much harder to convince artists to give them a share of their hard-earned profits.
So do up-and-coming musicians really need record labels anymore?
Record labels still provide value to artists who are ready to take the next steps in their careers. Labels have the funding that artists likely don’t have for promotion and distribution. Launching campaigns for the release of new music can be expensive. Having a team of highly connected individuals can expand an artist’s reach.
On top of that, record labels help artists produce better music by getting them into incredible recording studios and access to top-of-the-line equipment. Labels can hook artists up with the best producers in their genre and help them produce a better record.
Once the artist has their record complete, the label takes care of branding and PR to help the album sell. They help the artists decide which songs to release as singles and generate buzz before the album’s release.
Record label deals give artists credibility and help them make it big. Labels can also help artists obtain better instruments and sponsorships.
TL; DR: Record labels are relevant because they can significantly boost an artist’s career.
The Challenges for Record Labels Today
In addition to facing new digital consumer platforms and the increase of independent artists, record labels still have to juggle the many hats they wear for the artists they represent.
As we stated in the last section, artists can produce their own music without giving a cut of their profits away to people. But there are still musicians who understand the value of landing a recording contract. Labels open the door to possibilities for artists, and artists know that they’re being signed by the label because the label believes they have incredible potential.
But because of their dedication to getting a phenomenal return on investment, labels are in charge of accounting, catalog management, musical works, releases, special events, promotions, and more. Handling all of this can be overwhelming, to say the least.
The good news is that because technology has developed to provide artists with better software, the software for record labels has also improved exponentially.
Reprtoir is an all-in-one system for record labels and music producers to seamlessly handle every aspect of their business. Instead of keeping all of the elements of the label in separate places, Reprtoir integrates everything to empower your organization.
The system provides solutions for managing audio, video, works, royalties, releases, playlists for business, rights, CRM, and everything in between. Reprtoir was built to migrate data quickly and efficiently, and you can get set up in a matter of hours.
Why waste time trying to put all the pieces together when you can have everything in one place so you can focus on your artists? Try a two-week free demo to see just how easy it is to let Reprtoir help you top the charts.