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Record labels – a choice or a requirement?



The music-making business isn’t that easy it seems to be. It involves the blood and sweat of artists, labels and other professionals who together are responsible for putting out a great album or even a single. With the times changing, those involved in the music-creation business have set out to play additional roles to keep up with the listeners and their demands.

The effect of these changes has largely seen among record labels – independent or major – in recent times.

According to the report, ‘Same Heart, New Beat’, record labels have remade themselves to thrive in the era of streaming music.

The report states, “Record labels have created new business units to focus on enabling music startups and new business models. Labels have increased their investment in artists, in their own infrastructure and in the human capital required to amplify the artist’s vision and provide the best possible experience for fans to discover and listen to the music they love. By doing so, record labels have transformed themselves from B2B providers of albums into music-based entertainment companies — accelerators of artist brands that directly reach the music consumer on every platform, territory, and connected device around the world.”

New roles, new challenges

Record labels, as it turns out, became vitally important in 2018. For many musicians, the democratisation of music production and distribution carried the promise of reaching multitudes of eager fans at the touch of an upload button.

Yet, the virtually infinite selection of music available on most streaming platforms has actually made it more difficult than ever for new artists to break through, especially on the global stage.

Although it is certainly possible today for artists to create and self-distribute their music and gain a following, talented self-distributed DIY artists seldom reach enough scale to fulfill their promise.

During the preparation of this report, it quickly became apparent to us how labels have restructured the way they build value. Led by highly experienced, passionate music executives, labels today work in a highly coordinated fashion across territories, platforms, and media channels.


What record labels do has not changed. Now as ever, labels discover and develop artists, connect them with creative collaborators and make great records, promote and position them in the media and wherever fans go to get music and reward successful outcomes. But how labels do their job is nearly unrecognisable from what they did just a decade ago.

The digital transition has fundamentally changed every functional area due to the introduction of massive amounts of real-time discovery and consumption data.

“Label teams now analyse thousands of global inputs: Facebook fans, Twitter followers, YouTube views, Instagram activity, Shazam queries, and Wikipedia look-ups — even before analysing the daily tsunami of music service plays around the world in order to develop an agile, highly customised response plan for every track of an artist’s release. Indeed, superstar recording artists comprise nine of the top ten YouTube videos ever viewed; each with over 2.5 billion views; seven of the top ten Facebook accounts; six of the top ten Twitter accounts; five of the top ten most followed Instagram accounts; and all ten of the top ten among Twitter, Instagram and Facebook combined,” the report said.

Not a choice, but a requirement

Today, music fans discover and consume music through multiple channels and platforms — many of which, such as social media and fan clubs, are now routinely maintained by the artists’ record label. Many fans now listen to music via premium subscription services that give them access to tens of millions of tracks for less than the price of one CD per month, or in a “feels free” option of ad-supported delivery.

Fans also access music by watching label-created visual content on a myriad of screens, large and small, over video channels and via social media, while at the same time they may still buy CDs or vinyl records and listen to the radio.

In this day and age, partnering with a label is not just a choice, but it has become a requirement. The expanding constellation of businesses designed to help the DIY artist record, distribute, and market digital music has given artists more options to stay independent longer and often enables artists to make a sustainable living while building a fan base.

Every musician starts out as an independent, DIY project. When they attract the attention of a record label, whether indie or major, they may be in a very different negotiating position than a decade or so ago.

UMG Executive Vice President Michele Anthony put it this way: “Don’t mistake millions of streams for a career. It is extremely difficult to run a global campaign without the skill, resources, and muscle of a label — especially if you are writing, recording, and performing at the same time. Artists can’t get the full benefit or value of a label relationship unless they have a global deal. Platforms and digital service providers can’t offer global, career success even if it’s an exclusive with lots of promises.”

Changing times – for better or worse?

The change in the role of record labels has changed one of the reasons being the consumer demand for a music release is no longer determined by retail price or proximity to a music retailer, or by limited shelf space and stocking cycles in stores. Thanks to the streaming access model, music fans can now experiment and discover new genres and new artists (including foreign artists) because the cost to listen to one more album or a hundred new tracks is essentially zero.


And just as the mode of consumer listening has shifted from mostly physical products and permanent downloads to mostly digital streams, every aspect of label operations has reoriented toward a streaming-first consumption model and an always-on consumer mindset.

“The business of minting hits is no longer narrowly based on maximising short-term campaign outcomes for scarce broadcast radio slots or end cap displays in retail stores. Today, every label function is organised around fighting for a share of the attention economy, where consumers have unlimited access and choice, but not unlimited time,” the report points out.

In this new world, what labels do for artists has not changed, but how they do it certainly has. Labels are transitioning from B2B businesses to direct-to-consumer businesses focused on building direct relationships with fans.

This is because the shift from an ownership to an access model has necessitated a continuous flow of new content from artists rather than the traditional every-other-year album release cycle, often featuring lavish spending for the several months leading up to the week of release.

On their own, artists and managers may find it nearly impossible to keep up with the crushing demand of the modern music marketplace, but record labels are purpose-built for the current environment.

In addition, the labels’ promotional machines are equipped to push out a steady flow of singles, EPs, and albums and videos for all screen sizes and maximize the impact of each, while their social media teams enable artists to learn more about their fans while interacting directly with them.

The relevance of record labels

With the demise of the traditional album release cycle, labels have become more flexible with artist contract terms, no longer requiring signees to force themselves into a one-size-fits-all mould.

Today’s deals vary in length of time, delivery commitment, economics, copyright ownership terms, and more, allowing labels to tailor their services to meet the needs of specific artists.

(Pic: Chance The Rapper)

Over the last two decades, the music industry has faced extreme disruption as digital services were born and entered the mainstream.

Many new DIY artists have a myriad of options to self-release their music.

An example that deserves to be mentioned is the independent artist Chance the Rapper whose success has questioned the relevance of labels in an industry which is strongly driven by streaming platforms.

The most successful independent artist of our times grabbed the eyeballs around the world so much, that an entirely new category was added to the Grammy Awards, making history in the music world.

In 2017, Chance the Rapper, one of the most talented rapper of his generation and a pioneer in the music industry, bagged a Grammy for his album, “Coloring Book” and also another one for best rap performance in “No Problem,” featuring Lil Wayne and 2 Chainz.

While some musicians have found sustainable success without a label’s backing, there are certain things that only a label can do, particularly for artists with global ambition.

With the ease that technology brings, it has become even more difficult to rise to the top, thanks to the massive competition. Though artists can face this competition all by themselves, Seymour Stein, co-founder of Sire Records and the former vice-president of Warner Bros Records, advises artists “to not venture solo” at least at the start of their music career.

That said, artists shouldn’t approach just any label.

“Working with record labels will definitely help newer artists to find a place for their voice to be heard above the noise. There are great Indie labels all over the world. You don’t need a major label to rise to the top. Find the one that fits you the best and the rest will follow,” Seymour concluded.


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