Record labels have been around for many years, and for a long time, being signed by one meant that an artist had succeeded in the music industry.
Indeed, they have always played a crucial role in the music scene, but while this role was once purely that of recording and selling music, recent changes in the music industry following the rise of digital distribution and social media platforms have forced record labels to evolve and work to sell an artist’s brand as well as their music.
So let’s take a look at what exactly a record label does for an artist in 2024.
1. The different music labels and their involvement with artists
Before diving into the different roles that a typical record label plays, it’s important to note that there are two types of labels and that they operate slightly differently.
On the one hand, there are major record companies such as Universal Music Group, Sony Music, and Warner Music Group, which are known as the ‘Big Three‘ and which dominate the market.
These major labels are made up of subsidiaries. For example, Sony Music owns Columbia Records and RCA Records, Universal Music owns Capitol Music Group and Island Records, and Warner Music owns Atlantic Records.
Then there are the independent labels, which are generally much smaller, and also have a more restricted roster of artists, as they often concentrate on niche genres and target a specific audience. The main difference between them and the major labels is that they operate with their own independent funding and generally have a more personalized approach to managing their artists, for example by giving them more creative freedom and control over their music.
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2. A record label invests in your career by offering you financial support at the start
As the saying goes, it takes money to make money and that’s especially true in the music industry.
You may have gone so far on your own, but maybe now you’re plateauing and need money to take your career to the next level. The truth is, even if you’re doing really well as an independent artist and you’ve managed to raise money on your own, chances are it’s still nowhere near what a record company could invest in your career.
So let’s say that, as an artist you’ve been scouted by the A&R (Artist and Repertoire) department of your favorite record label and offered a recording contract. When you sign this contract, the record company invests a sum of money in the development of your career. This financial support is supposed to help you get ahead and you can use it at every stage of your career, from recording to marketing to touring.
But this money is an advance, so it’s you, the artist, who has to pay it back with the first earnings from your music. Once you have paid it back in full, you start to receive royalties on your music, which you share with the record company according to the percentage agreed in the recording contract (it may be advisable to consult a lawyer specializing in entertainment law when you sign your very first recording contract, so that you fully understand what you are signing).
So the first thing a record company can do for you as an artist is to inject money into your career so that you can take it to the next level. And that initial funding, as we’ll see, will affect every aspect of your musical career as an artist.
3. A record label produces master recordings of your songs
Unless you had access to a recording studio or professional recording equipment, chances are your first demos were recorded in your bedroom or garage.
If they sign you, the first thing the record company will do is produce master recordings of your songs to create the final versions that will be released to the public.
This process involves recording, mixing, and mastering the songs in your repertoire. Chances are that a major record company will have in-house producers and engineers to help you with this task, whereas independent record companies may work with external professionals and pay for studio time, any producer they hire, and any songwriters or musicians who have been brought in to help with the project.
4. A record label distributes your songs
Music distribution has changed a lot in recent years and today, it mostly revolves around streaming. Therefore, distribution is largely handled digitally, through digital distributors such as Tunecore, DistroKid, and CD Baby. These will distribute your music on various digital service providers (DSPs), such as Amazon Music, and iTunes, and streaming services such as Spotify, Pandora, Apple Music, Deezer, and Tidal.
Now, although digital distribution dominates the market, it’s still worth talking about physical distribution, as labels may want to distribute physical copies of music, including CDs, vinyl records, and cassettes. This is especially true as there seems to be a growing demand for this type of merchandise (more on this later). Consequently, the label will work with music retailers and online shops to stock and sell physical products.
One last thing to talk about when discussing distribution is licensing agreements. If you’ve never heard of these agreements, they allow TV shows, films, commercials, video games… to use the exact recording of a song. They don’t have the right to do that unless they’ve signed a license agreement, and it’s the job of a record company to negotiate such agreements on behalf of the artists.
5. A record label sells your songs
The overall aim of a record company is always to sell the music and, in a way, the artist.
But nothing happens without proper marketing and while this can be difficult for an independent artist, a record label can invest significant amounts of money and develop a marketing strategy to get your music and content seen by more people.
A well-thought-out marketing strategy encompasses several things and the first thing any marketing team will probably tackle is developing publicity campaigns to promote your new record. Essentially, this is about securing media coverage for the artist, whether it’s press releases, interviews, a massive billboard in Times Square… anything that can help you reach a wider audience and increase your fan base.
Another facet that will be taken care of by the record company’s marketing team is promoting the artist’s music on the various streaming platforms. We saw them in the previous section on distribution, but now we need to talk about playlist placement. If you’re an independent artist, it’s up to you to promote your music for playlist curation, as you’ll be responsible for promoting the release of your music. The truth is that this can be really difficult because it involves a lot of networking and a lot of pitching (one thing that can make the process easier is to get in touch with playlist curators directly through Groover).
But if you’re signed to a record label, the marketing team will use their connections to make sure your songs are heard by the right people and featured on influential playlists, or even on the radio.
Another thing the marketing team will probably look after is your social media presence. This depends on the size of the label, as well as your own ability to promote your music on social networks. If it’s something you struggle with, record labels usually have someone on their team who specializes in social media marketing and manages the social media of the label’s artist roster. Because the truth is that most of your fanbase is, as an artist, on platforms like Instagram, Facebook, and TikTok.
As well as managing your social media, your label can also help you create content, whether that’s a great music video for you to upload to YouTube or Vevo, or getting high-quality professional photographs to promote your new release.
6. A record label helps you with your other sources of income
Whereas it used to be mostly about selling music, record companies are now heavily involved in the whole brand that the artist represents. That whole brand is made up of many revenue streams, music being one of them, but others being touring, endorsements, and merchandise.
Let’s look at the first point. A large part of a musical artist’s career is linked to tours and gigs. Not only can record companies finance concerts and tours, but they also help you organize them by booking the right venues and taking care of travel and accommodation arrangements, and the marketing team can promote the tour and generate buzz around it.
Another thing a record company can help you with is creating merchandise to be sold during the tour. Merchandising is very important for an artist and is a key source of income. Whether it’s t-shirts, caps, CDs, or vinyl records, the record company can finance the merchandising and get involved in the creative process. For example, it can help artists create the cover art for their first album by hiring a graphic designer or photographer.
Finally, a record company can help you secure brand partnerships and sponsorship. Again, this is because they have established relationships with brands, companies, and industry influencers and they can introduce you as an artist to potentially endorse products and then negotiate deals on your behalf.
In conclusion, record companies, whether majors or independent labels, can be very helpful for artists in 2024, offering them a platform for exposure and a structure for growth, as well as the resources they need to develop their music careers and succeed in the competitive music industry.
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