What Is A Record Label? A Full Rundown On The Pillars Of The Music Industry

A record label is a brand or trademark associated with the marketing of music recordings and music videos.

The term originated in the record industry, referring to the companies that were the producers and distributors of records, as well as the companies that owned the rights to the recordings (see what does it mean to own your masters?).

The history of record labels can be traced back to the late 19th century, when the phonograph (or gramophone) was invented.

history of record labels

Initially, record labels were mostly small, independent companies that produced and sold records.

They were responsible for discovering and signing new artists (see A&R), and for producing, distributing, and promoting their music.

One of the first record labels was the Berliner Gramophone Company, founded in 1895 by Emil Berliner.

The company was known for producing high-quality recordings and for signing some of the biggest names in the music industry, including Enrico Caruso and Sergei Rachmaninoff.

In the early 20th century, the record industry underwent a major transformation with the advent of radio broadcasting.

Record labels began to produce recordings specifically for radio airplay, and the music industry became more commercialized.

This led to the rise of larger record labels, such as Columbia Records and RCA Victor, which had the resources to sign and promote popular artists.

Another significant development in the history of record labels was the introduction of the LP (long-playing) record in 1948.

The LP allowed for longer recordings, and it was a popular format for many years. This led to the rise of genres such as jazz and classical music, which were well-suited to the LP format.

In the latter half of the 20th century, the music industry underwent another major transformation with the advent of digital technology.

This led to the rise of digital music formats, such as MP3 (which we all still know and love today), and the decline of physical formats like vinyl records and CDs.

It also led to the rise of online music streaming services, such as Spotify and Apple Music, which changed the way people listen to and discover music.

In addition to producing and distributing music, record labels also own the rights to the recordings they release.

This is known as “master ownership.” The label has the right to distribute the recordings and to collect revenue from sales and licensing.

This revenue is then used to fund the production and promotion of new recordings.

What Is A Record Label? A Full Rundown On The Pillars Of The Music Industry

If Record Labels Were Created For Music Distribution, Do We Need Them Today?

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Record labels may have been created to distribute music when we had limited reach and audience, but do we really need them in today’s digital age?

The answer is a resounding yes.

Sure, the rise of digital technology has made it easier for artists to produce and distribute their own music, but record labels still offer a number of crucial services that can help artists succeed in the competitive world of music.

First and foremost, record labels provide financial support to artists.

This can include funding for the production and promotion of their music, as well as advances and royalties.

This is especially important for up-and-coming artists who may not have the resources to produce and promote their music on their own.

In addition to providing financial support, record labels also offer expertise and experience in the music industry.

This can include support with marketing and promotion, as well as connections to industry professionals.

This can be incredibly valuable for artists looking to build a successful career in the music industry.

Furthermore, being signed to a record label can provide an artist with credibility and legitimacy.

It signals to fans and the industry that an artist is talented and worth listening to. This can help to build an artist’s reputation and increase their visibility in the music world.

So, record labels aren’t dying any time soon.

What Exactly Does A Record Label Do?

Here’s a more detailed look at what a record label does for an artist:

  1. Signing an artist:

    When an artist is signed to a record label, they enter into a contract that outlines the terms of their relationship, including how their music will be released and distributed, and how the profits will be split.
    • Developing an artist:

      After signing an artist, a record label will often provide support and resources to help them develop their sound and image.

      This might include funding for recording sessions, hiring producers and other industry professionals, and providing access to top-tier studios and equipment.
    • Marketing and promoting an artist:

      Once an artist’s music is ready for release, the record label will take on the task of promoting it to the public.

      This might include creating marketing and advertising campaigns, coordinating tour dates and other live events, and working with media outlets to secure coverage and interviews.
    • Releasing and distributing an artist’s music:

      A record label is responsible for releasing an artist’s music to the public, which typically involves pressing physical copies of the album (e.g. CDs and vinyl) as well as making it available for streaming and download on digital platforms like Spotify and Apple Music.

      The label will also handle distribution, which involves getting the artist’s music into stores and other outlets where it can be purchased by fans.
    • Collecting and distributing royalties:

      When an artist’s music is played or purchased, they are entitled to receive a portion of the profits, known as royalties.

      It’s the record label’s job to collect these royalties and distribute them to the artist according to the terms of their contract.

    Major Labels Vs. Independent Labels: What Is The Difference?

    Major labels and independent labels are two different types of record labels that operate in the music industry.

    Here are some key differences between the two, and some reasons why an artist might choose to sign with one over the other:


    Major Labels

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    Major labels are typically large, well-established companies that are owned by major media conglomerates.

    They have a lot of financial resources and a wide network of distribution channels, which allows them to promote and distribute music on a large scale.

    Some examples of major labels are the big three; Sony Music, Universal Music Group, and Warner Music Group.


    Independent Labels

    Independent labels, on the other hand, are typically smaller and independently owned.

    They may not have the same level of financial resources or distribution channels as major labels, but they often offer more personalized attention and support to their artists.

    Independent labels can range from small, local labels that only release a few records per year, to larger independent labels that have a national or even global reach.

    Which Is Better?

    One reason why an artist might choose to sign with a major label is because of the financial resources and distribution channels that the label can provide.

    This can be especially important for artists who are just starting out and need help getting their music heard by a larger audience.

    Major labels can also provide access to high-quality recording studios, producers, and other resources that can help an artist make a professional-sounding record.

    However, signing with a major label can also come with some drawbacks

    For example, major labels often have a lot of control over an artist’s creative direction and image, and they may require artists to make music that is commercially viable.

    This can limit an artist’s ability to experiment and take risks with their music.

    In addition, major labels often require artists to sign long-term contracts that can be difficult to get out of, and they may take a large portion of an artist’s earnings from record sales and touring.

    Independent labels, on the other hand, may offer more creative freedom and control to their artists.

    They may also be more flexible in their contracts and take a smaller portion of an artist’s earnings.

    This can allow artists to retain more ownership over their music and careers. However, signing with an independent label can also come with some challenges.

    For example, independent labels may not have the same level of financial resources or distribution channels as major labels, so it can be harder for an artist to reach a large audience.

    Can An Independent Artist Be Successful?

    Can An Independent Artist Be Successful?

    Yes, it is possible for independent artists to be successful.

    In fact, many independent artists have achieved significant success without signing with a major label:

    ArtistLabelReleaseSuccess
    Chance The RapperChance The Rapper LLC10 Day, Acid Rap3 Grammy awards, collaborations with major labels
    Amanda Palmer8 Ft. RecordsWho Killed Amanda PalmerSold-out shows, music featured in movies and TV shows
    Macklemore & Ryan LewisMacklemore LLCThe HeistInternationally renowned, multiple Grammy awards, music featured in movies and TV shows
    Death Cab for CutieBarsuk RecordsSelf-released first two albumsMainstream success, Grammy-nominated
    Bon IverJagjaguwarFor Emma, Forever AgoCritically acclaimed, two Grammy awards, music featured in movies and TV shows

    Chance The Rapper:

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    Chance The Rapper started out as an independent artist, releasing his first two mixtapes on his own label, Chance The Rapper LLC.

    Chance’s success as an independent artist helped him gain recognition and a dedicated fanbase, which allowed him to collaborate with major labels like Apple Music and win three Grammy awards.


    Amanda Palmer:

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    Amanda Palmer is an independent artist who released her first album, Who Killed Amanda Palmer, through her own label, 8 Ft. Records.

    Since then, she has become known for her unique and innovative approach to music and has built a dedicated fanbase through her touring and social media presence.

    She has also released several successful albums and EPs through her independent label.


    Macklemore & Ryan Lewis:

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    This hip-hop duo released their first album, The Heist, independently through their own label, Macklemore LLC.

    They gained a large following through their touring and social media presence, and their independently released album went on to become a commercial success.

    They have since signed with a major label and have won multiple Grammy awards for their music.


    Death Cab for Cutie:

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    Death Cab for Cutie started out as an independent band, self-releasing their first two albums on their own label, Barsuk Records.

    They gained a dedicated fanbase through their touring and the success of their independently released albums, which allowed them to sign with a major label and achieve mainstream success. They have since become a Grammy-nominated band.


    Bon Iver:

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    Bon Iver released their first album, For Emma, Forever Ago, independently through their own label, Jagjaguwar.

    The album was a critical and commercial success, and Bon Iver went on to sign with a major label and release several more successful albums.

    They have also won two Grammy awards for their music.