There’s a lot of confusion in the music industry about record labels — what do they do these days? With the internet freeing the artists to attain all resources to market their music, can an artist succeed without one? Trying to define the importance of music labels in 2018 seems like a difficult task. Hopefully, this provides an answer to the query.

A record label is a company that takes care of recording, manufacturing, branding, producing, distribution and PR/Marketing. They allow all aspects of artist’s career to grow using its own resources for 20-80% of sales.

There are two kinds of Record Labels – Major Record Labels and Independent labels.

Major labels are media giants and highly influential people that used to dominate and control the music industry. They manufacture, distribute and market the music of the artists signed to contract. Although budgets are not what they used to be, the majors still have far more money for things like marketing and production. Long-standing reach and influence come with a deep-seeded Rolodex of contacts across all aspects of the industry. Being signed to a major label has its benefits, in that larger media outlets and more meaningful opportunities may be more likely to take an interest in the artist.

Contrary to popular belief, major labels do sign many artists, but much of what is signed quickly gets turned over and dropped by the label. Being that major label record companies are a business, they likely do everything they can do profit as much as possible from their investment in the artist, their music and their brand. Not only does this mean the possibilities of small royalties, but it means the artist does not get to keep the rights or even the creative control over their music.

Indie music labels are smaller companies who are less likely to be pressured by a board of directors to sign a specific sound or promote a particular look just for success on the charts. Independent record labels tend to have much smaller artist rosters, allowing the artist to get more face-time with their team to discuss things like strategy and execution. The contracts are known to be more artist-friendly, giving the artist more money for their work through either profit-sharing programs, or a more significant percentage of revenue than offered by the major labels.

An issue for independent labels is funding. A lack of funding means a smaller budget for recording, production of physical copies, packaging, distribution costs, tour support, merchandise, etc. Although a smaller size allows artists to form stronger relationships with an indie record label, the label itself has less influence and reach within the industry.

THE THIRD WAY – DIY

No label means that the artists have complete control over the direction of their music. They also have full control over their marketing, and the free will to say yes or no to any opportunities that come their way. Simply put, this is the ideal scenario possible for an artist. Without a label, any revenue generated from things like album sales and sync licensing deals goes right into the artist’s pocket. While DIY means Do It Yourself, it doesn’t mean – do it alone. The artists are their own boss, so they can surround themselves with the people who share their vision and have the skills to help them to move their career forward, together.

The Internet has freed artists from dependence on record labels, and through social media, many artists market and distribute their music independently at a much lower cost. But everyone in attendance could agree that the business-related tasks that come with releasing a record are too much for one person, or band, to handle on their own. It’s a great and educational conversation that covers almost every aspect of what indie labels do, including re-emerging cassettes, the difficulties of vinyl, national and global expansion, distribution, major label partnerships, touring, photography, Bandcamp benefits, managing submissions, and managing artist expectations!

Apart from that, the starting point has moved where an artist starts their career themselves and then they’re looking for a partnership. To me, the modern label has got to stand for something, and it has to stand for something that appeals to that particular artist’s ethics and vibe and what they want to do, so there’s a value that gets formed between them that’s unique and necessary.

“Labels are only as relevant as the vision and people behind them. I don’t think a label is particularly necessary for an artist to succeed in this day and age but when done correctly it can come to define culture pivotally. Look at labels like Sub-Pop, Exit Records, Ninja Tune, TDE – they’ve all impacted music culture in a significant manner because of their philosophy about what music could mean and be. When done right, the label forms a more considerable part of the music industry narrative by bringing together artists and acquiring the power to shift what that can narrative can be.”

– Uday Kapur (Co-Founder, Azadi Records)

Now all these things can be taken care of by the artist with the use of many applications and websites that provide help in getting necessary steps done in the process of releasing music. Nevertheless, it takes a village to develop an artist whether you call that village a label or not.

To stay in business, given the reality of the digital age, record labels now offer so-called “360 deals” to artists that give them a cut of all the artist’s work, including album sales, media appearances, and product endorsements. Labels now manage enormous complexity, dealing with many hundreds of digital channels right across the world, and have become expert in understanding and leveraging a massive volume of data to inform marketing strategies and present new opportunities to artists. Particularly in the areas of brand partnerships, sync, merchandise and live performances, and inevitably, the relationship between label and artist have become more flexible, with labels offering different kinds of partnerships.

In a streaming world, labels and artists only generate revenues from recordings for as long as the audience keeps playing the tracks. Promotion is no longer a “first-weekend big box office” affair; it’s a continuous process. Understanding who and where your audience is can be critical. Additionally, in a universe dominated by playlists, albums don’t mean as much as they did — single track rules.

We do believe that, specifically in a young and upcoming listening culture like in India, more and more record labels are the need of the hour to build and evolve the foundations of listeners for future artists. Although an artist has all the tools to release their music individually, a label is like a singular point of amalgamation for the listeners to tune in to. In addition to that, the feedback a label provides in the creative process and the separation of the non-creative aspects from the workload of the artists, coupled with the combined resources available to the label for advanced distribution channels are definitely conducive to an artist allowing him/her to focus more and more and primarily on their art.

– Sharan Punjabi (Co-Founder, Nrtya)

It speaks volumes for the tenacity, passion and entrepreneurship of independent labels, and the public’s desire for musical diversity, that even in these times of global dominance by major corporations, Independent labels can still create a relevant market for themselves.

In addition to discovering new artists, indies cultivate new producers and develop modern recording techniques, new sounds, new songwriters and new approaches to marketing and monetizing music. They cleverly use their ingenuity to build a base for artists and their music and use their smaller size as an advantage. In the digital world, smaller is better. In a world where algorithms drive music to its highest potential and exposure, the flexibility, resilience, speed, diversity and vision of indies can beat the force and scale of the majors.

For artists trying to break into the music industry, it is possible to attract attention to their music all on their own. However, to see a return for their music, or just prevent their songs from being copied, it seems like labels have found a way to continue to stay relevant despite the fall of the CD industry – for now.