How they work, the structure, and different departments roles and responsibilities.
This week's topic: recording labels and how they work. Since this is part of the music industry that most people tend to think of, I thought I’d start here. Once again, I am learning about these topics, so if there’s anything I miss, feel free to let me know!
Firstly, recording labels do not equal the music industry. They are part of it, albeit a huge stakeholder in the industry (and are represented by the Recording Industry Association of America, aka the RIAA). Record labels are first and foremost in charge of the actual production of music– lyrics, sound engineering, producers, singers– all that good stuff. Then, they are in charge of the promotion and distribution of those songs that they just made (produced).
To sum up the history, record labels that started in the 1920s to manufacture records for the phonogram continued to evolve as the economy shrunk and expanded and as technology made advancements. From the phonograms came radio, which soon gave way to vinyl, cassettes, CDs, piracy (Napstar), to streaming in today’s world.
So, how does the structure work? While it used to be rather straightforward, with recording labels producing the music and marketing it, manufacturers making physical CDs or albums, and distributors getting it to stores where, finally, someone like you or me could buy it. Now, we stream music and subscribe to platforms like Spotify or Pandora or watch/listen to music on YouTube.
Some things are still similar: artists can work with recording labels, who work with distributors to get the songs on streaming platforms, and who also collect the royalties. However, artists today can skip this whole system. Instead, they can produce their own songs on a laptop and release them directly onto streaming platforms, like SoundCloud (question: is the age of Soundcloud rappers over?). The one thing that independent artists don’t have is money. And that is the appeal of a recording label, which leads to the next part: why a recording label if an artist can do everything themselves?
First, let’s break down a recording label a little more.
It seems like it’s a goal of many artists to be picked up by a major label, and that is exactly what labels are doing: scouting, looking for the next talent. In the past, scouts would essentially place ‘bets’ on talent, invest, and hope that they succeed. Now, an artist should have their own following and presence before getting signed, meaning 20k or more followers on social media. This role of scouting is done by perhaps one of the best-known departments: A&R, aka Artist & Repertoire.
Once a contract is signed, the recording label finances an album and the entire release cycle, from production to marketing and promotion to distribution. This leads to another responsibility of A&R: continuing to work with an artist and help guide the creative direction of an artist and working, in a sense, as a brand manager for an artist.
On to the next part of recording labels: producing the actual song (or record). This is a creative process that is unique and different for every artist. In the past, having a full-on studio and a label’s endorsement was essential and considered a must. However, as technology has evolved, that is not the case anymore. The invention of the 8-track machine in the 1950’s allowed for several sounds to be mixed into a record at once was a pivotal moment in the music industry. And now, the Digital Audio Workplace (DAW for short) that is seamlessly integrated into a laptop has further revolutionized how, when, and where music is made and produced.
Once an artist is found and a record produced, it’s time to promote and market it for consumers to hear and buy; the third role of a recording label. This role is relatively straight-forward. Get artists and their songs on the radio, have journalists cover the release, buy ads and T.V. appearances, etc. What’s different about today, however, is fan and artists interaction, which enables and means that fans are also the media, and free at that (more on this later). In short, the goal for marketing and promotion is to get people to listen, buy, and talk about the record.
Lastly, we have distribution. Simply put, distribution’s responsibility in today’s world is uploading songs and records onto streaming platforms (like Spotify). That said, a good distributor should also know how to make a record more visible on a platform (once again, more on this topic in a separate blog post).
Licensing and sync are also part of the recording label, that is the department who deals with artists' records being used in commercials, movies, or TV shows.
And if you're wondering how a label makes money, here’s a quote from Billboard:
“Labels typically make money on songs’ master recordings one of three ways: through music sales, downloads and streaming of an artist; brand partnerships where an artist endorses a product; and master licensing, using the exact recording of a song for a commercial, movie or TV show. Labels can also make money on touring, merch and other opportunities based on deals signed with artists.” (Billboard, 2023)
That’s all for this week. A reminder that I am still learning about the music industry and am therefore not an expert.
Stay tuned for the next post: A Deep Dive into A&R
Sources
Aniftos, R. (2023, April 20). Billboard explains: What role do record labels play?. Billboard. https://www.billboard.com/music/music-news/record-labels-billboard-explains- 1235296400/
Pastukhov, D. (2023). The Mechanics of Recording Industry: A Brief History & Its Functions. Soundcharts. https://soundcharts.com/blog/mechanics-of-the-recording-industry
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