Off the record: what do record labels actually do?

And should you still sign to a label?

Record labels have had wildly different reputations throughout the years. In the ’50s and ’60s, signing to a label was the only way to get your music out in the world, in the ’70s they were crooks, in the ’80s and ’90s they were moneymaking machines and in the ’00s they were assholes for suing Napster, your neighbor’s kid and your grandma for downloading music. But what do they actually do? Do labels still have a right of existence? And is it still necessary to sign to a label? Let’s dive in. First we’ll take a look at the activities of a label.

Label activities

Promo/Marketing

Radio

This was especially important in the pre-internet days. The only way to reach (big) new audiences was being played on the radio. Almost all labels had an in-house or freelance plugger that they employed exactly for this reason. A plugger would, as you guessed, plug new songs at the radio stations in an attempt to gain airplay or even regular rotation. Of course, the bigger the artist you are working with the easier this is/was. Of course the very best pluggers had good (personal) relationships with the tastemakers at the radio. Nowadays this is a lot less important, although it can still break an artist. As mentioned earlier, some pluggers are freelancers and as such they can also be hired independently from a label, so as an artist you could hire a plugger to plug your new single to the radio. They are quite pricey and it’s hard to tell whether they are doing a good job for you or not since it’s so abstract.

A small sidenote: pluggers traditionally also serviced TV stations, so they would try to get artists airtime on different programs or as a guest on different shows.

Online

As the internet became more important, labels started doing more promotions for their artists online as well. This could mean anything from a feature on a Youtube show, to a blog review, to an internet radio interview, to an online ad campaign. In recent years this has gradually become more and more of a focus point for labels. Traditional marketing is not as effective anymore as back in the day, so this has become the new way to break artists. Look at the Arctic Monkeys, they have risen to fame through MySpace alone. Could they have developed into the act they are today without any outside help? No, they definitely would have needed help for that, but it proved a solid foundation for the steps to come.

Press

Tied in heavily with radio and old school marketing is press. Newspaper write-ups, in-depth interviews, cover stories, you name it. Anything that has to do with printed media falls under this term. Just like a radio plugger, a press promoter tries to get the best and as much press as possible. Also available for hire outside of label constructions, they charge the same kind of rates as pluggers, so they are quite expensive. Some press promoters have turned towards the online press game, so everything as described there. A good press promoter will also often have contacts in the TV world so at times it’s worth a shot.

Traditional Marketing

Ah yes, traditional marketing. Billboards, posters in the city, street teams flyering all over town. Back in the good old days this was an excellent way to reach large crowds of people. Labels would pay to have posters placed in cities, bus stops, they would rent giant billboards, etc. It all seems a little extravagant nowadays but this used to be a normal thing, and some labels are still doing this.

DSPs

Also known as Digital Service Providers. This department is truly a department suited to our modern times. Often this is put under digital or a similar moniker but in the end it’s all about streams, baby. The labels reach out to Spotify, Apple, Amazon, etc., in an effort to secure those highly sought-after playlist placements, in turn sometimes generating millions of streams.

A&R

Officially dubbed Artist & Repertoire, nowadays A&R is all about finding what new bands to sign. Officially A&Rs also help develop an artist, so they give advice on songs, sound of the music, looks, and creative direction. A good A&R can be invaluable and can also make or break an act.

Advances

Let’s talk money. Just as with publishers, labels dole out advances. The saying goes that for every nine artists at a label there is one hit artist paying for the rest. Labels used to pay out huge advances to lots of artists. That has changed slightly, but don’t be fooled, they didn’t do this out of charity. Often a high advance was a way to keep the other terms in a deal in their favor.

Network

One of the bigger upsides to signing with a label is the acces to (parts of) their network. This is why it’s important to sign to a label with similar musicians. You can try and get support slots on tours, collaborations and featurings with other artists on the label. Things become a little easier since you’re all part of the same club, and depending on how the label nurtures this group culture, it can really feel like one big family. Next to the artists, a label can also help with accessing certain professionals. For some agents or publishers the fact you are signed to a label (of certain prestige) can make the difference in a deal (or even the presence of a deal at all!). And of course people at the label can also introduce you to the right people if you are looking for someone specific. This is very much an informal role of a label and should happen organically.

Manufacturing / Distribution

So you have an album or EP and it’s finished. Traditionally, labels would also take care of the physical manufacturing and distribution of said records. They would often have better rates with the manufacturers and have deals in place with the distribution companies. Of course, in the past 20 years there has been a serious decline in physical formats, so nowadays this is something often reserved for bigger or niche artists. For some niches physical formats works exceptionally well, such as jazz or hardcore punk.

So now it’s clear what labels do, let’s briefly take a look at the different kinds of deals. Because it’s good to know what they do at what price.

Deals

Artist Deal

This is when they sign an artist “completely”. The label buys the master tapes and has the artist under contract for a certain amount of time. This means that the artist is also restricted creatively, the label has input on all creative choices and must approve the artist featuring and so forth on other people’s records. This is a very old-school type of deal. Often the label will have many options after the first product.

360 Deal

At some point labels started to realize that when they built big artists a lot of people were profiting off of that. So they decided to acquire a stake in every revenue stream of an artist. The reasoning being this is that those revenue streams would never reach the heights they did without the label, so therefore the label should have a piece of this as well.

Licensing Deal

My favorite kind of deal. In this deal you license the masters to the label for a set amount of time, after which they revert back to you again. The split on these deals is often a lot better as well, I’ve seen 50/50 splits, but also even 70/30 in favor of the artist. Of course, the label is less invested in you as an artist so I can be a little harder to be top of pile this way.

Distribution+ Deal

Sometimes all you need is a partner in (digital) distribution and perhaps some minor services next to it. Then of course you can also go for a distribution+ deal. This basically means that the label will distribute your music digitally and physically for a low percentage. You can often tack on some promo services for a slightly bigger percentage or even a small fee. This is of course a very B2B model where the label is not invested in you as an artist at all.

Okay, so in broad strokes we now know what a label does and what kind of deals they have. What kind of labels are there, then?

Indie Vs. Majors

There’s the obvious division between majors and indies. Major labels are the big three: Warner, Universal and Sony. There used to be more but due to buy-outs, mergers, liquidations and whatnot these three are left. Combined they hold a very very big market share (the majority).

Now in regard to indies there’s too many to name. What defines an indie, what’s in a name, is the fact that they are independent. Independent from a major label, to be precise. Of course there are indie labels who are partly or completely owned by major labels, and thus we can question their indie credibility but that’s a whole other discussion. You can read more on indies vs. majors here.

Conclusion

In my opinion it’s absolutely not necessary to sign to a label. There are a lot of alternatives and ways to do it yourself. In the end it’s all about how much work you want to put in yourself, but in my experience the acts that are most attractive to labels are the ones that work the hardest themselves. The label can then step in and truly elevate the artist or the product. And of course they can be quite handy for a nice sum of money, but if you really need money then there are better ways than signing a potentially bad deal.

Disagree with me? Let me know in the comments or email me at info@bohemianmgmt.com and we’ll duke it out.

Advanced/further reading

Latest articles

Related articles