Record label

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A record label, or record company, is a brand or trademark of music recordings and music videos, or the company that owns it. Sometimes, a record label is also a publishing company that manages such brands and trademarks, coordinates the production, manufacture, distribution, marketing, promotion, and enforcement of copyright for sound recordings and music videos, while also conducting talent scouting and development of new artists ("artists and repertoire" or "A&R"), and maintaining contracts with recording artists and their managers. The term "record label", derives from the circular label in the center of a vinyl record which prominently displays the manufacturer's name, along with other information. [1] Within the mainstream music industry, recording artists have traditionally been reliant upon record labels to broaden their consumer base, market their albums, and promote their singles on streaming services, radio, and television. Record labels also provide publicists, who assist performers in gaining positive media coverage, and arrange for their merchandise to be available via stores and other media outlets.

Contents

Major versus independent record labels

Record labels may be small, localized and "independent" ("indie"), or they may be part of a large international media group, or somewhere in between. The Association of Independent Music (AIM) defines a 'major' as "a multinational company which (together with the companies in its group) has more than 5% of the world market(s) for the sale of records or music videos." As of 2012, there are only three labels that can be referred to as "major labels" (Universal Music Group, Sony Music Entertainment, and Warner Music Group). In 2014, AIM estimated that the majors had a collective global market share of some 65–70%. [2]

Major labels

Present

Major record labelYear foundedHeadquartersDivisions US/CA market share (2019)
Universal Music Group (Euronext Amsterdam :  UMG

)

September 1934;87 years ago Hilversum, North Holland, Netherlands (corporate)
Santa Monica, California, United States (operational)
List of Universal Music Group labels 54.5%
Sony Music September 9, 1929;92 years ago New York City, New York, United States List of Sony Music labels 23.4%
Warner Music Group (Nasdaq :  WMG)April 6, 1958;64 years ago New York City, New York, United States List of Warner Music Group labels 12.1%

Past

PolyGramPolyGramUniversal Music GroupSony MusicWarner Music GroupPolyGramMCA RecordsSony BMGWarner Music GroupSony MusicWarner RecordsColumbia RecordsWarner RecordsBertelsmann Music GroupWarner RecordsEMIBertelsmann Music GroupWarner RecordsGramophone CompanyPolyGramDecca RecordsRCA RecordsAmerican Record CorporationRecord label

Record labels are often under the control of a corporate umbrella organization called a "music group". A music group is usually affiliated to an international conglomerate "holding company", which often has non-music divisions as well. A music group controls and consists of music-publishing companies, record (sound recording) manufacturers, record distributors, and record labels. Record companies (manufacturers, distributors, and labels) may also constitute a "record group" which is, in turn, controlled by a music group. The constituent companies in a music group or record group are sometimes marketed as being "divisions" of the group.

From 1988 to 1998, there were six major record labels, known as the Big Six: [3]

  1. Warner Music Group
  2. EMI
  3. Sony Music (Known as CBS Records until January 1991)
  4. BMG (Formed in 1984 as RCA/Ariola International)
  5. Universal Music Group (Known as MCA Music until 1996)
  6. PolyGram

PolyGram was merged into Universal Music Group (UMG) in 1999, leaving the rest to be known as the Big Five.

In 2004, Sony and BMG agreed to a joint venture and merged their recorded music division to create the Sony BMG label (which would be renamed Sony Music Entertainment after a 2008 merger); BMG kept its music publishing division separate from Sony BMG and later sold BMG Music Publishing to UMG. In 2007, the four remaining companies—known as the Big Four—controlled about 70% of the world music market, and about 80% of the United States music market. [4] [5]

In 2012, the major divisions of EMI were sold off separately by owner Citigroup: most of EMI's recorded music division was absorbed into UMG; EMI Music Publishing was absorbed into Sony/ATV Music Publishing; finally, EMI's Parlophone and Virgin Classics labels were absorbed into Warner Music Group (WMG) in July 2013. [6] This left the so-called Big Three labels.

In 2020 and 2021, both WMG and UMG had their IPO with WMG started trading at Nasdaq and UMG started trading at Euronext Amsterdam and leaving only Sony Music as wholly-owned subsidiary of an international conglomerate (Sony Entertainment which in turn owned by Sony Group Corporation).

Independent

Record labels and music publishers that are not under the control of the big three are generally considered to be independent ( indie ), even if they are large corporations with complex structures. The term indie label is sometimes used to refer to only those independent labels that adhere to independent criteria of corporate structure and size, and some consider an indie label to be almost any label that releases non-mainstream music, regardless of its corporate structure.

Independent labels are often considered more artist-friendly. Though they may have less financial clout, indie labels typically offer larger artist royalty with a 50% profit-share agreement, aka 50-50 deal, not uncommon. [7] In addition, independent labels are often artist-owned (although not always), with a stated intent often being to control the quality of the artist's output. Independent labels usually do not enjoy the resources available to the "big three" and as such will often lag behind them in market shares. However, frequently independent artists manage a return by recording for a much smaller production cost of a typical big label release. Sometimes they are able to recoup their initial advance even with much lower sales numbers.

On occasion, established artists, once their record contract has finished, move to an independent label. This often gives the combined advantage of name recognition and more control over one's music along with a larger portion of royalty profits. Artists such as Dolly Parton, Aimee Mann, Prince, Public Enemy, among others, have done this. Historically, companies started in this manner have been re-absorbed into the major labels (two examples are American singer Frank Sinatra's Reprise Records, which has been owned by Warner Music Group for some time now, and musician Herb Alpert's A&M Records, now owned by Universal Music Group). Similarly, Madonna's Maverick Records (started by Madonna with her manager and another partner) was to come under control of Warner Music when Madonna divested herself of controlling shares in the company.

Some independent labels become successful enough that major record companies negotiate contracts to either distribute music for the label or in some cases, purchase the label completely, to the point where it functions as an imprint or sublabel.

Imprint

A label used as a trademark or brand and not a company is called an imprint, a term used for the same concept in publishing. An imprint is sometimes marketed as being a "project", "unit", or "division" of a record label, even though there is no legal business structure associated with the imprint. A record company may use an imprint to market a particular genre of music, such as jazz, blues, country music, or indie rock.

Sublabel

Music collectors often use the term sublabel to refer to either an imprint or a subordinate label company (such as those within a group). For example, in the 1980s and 1990s, "4th & B'way" was a trademarked brand owned by Island Records Ltd. in the UK and by a subordinate branch, Island Records, Inc., in the United States. The center label on a 4th & Broadway record marketed in the United States would typically bear a 4th & B'way logo and would state in the fine print, "4th & B'way™, an Island Records, Inc. company". Collectors discussing labels as brands would say that 4th & B'way is a sublabel or imprint of just "Island" or "Island Records". Similarly, collectors who choose to treat corporations and trademarks as equivalent might say 4th & B'way is an imprint and/or sublabel of both Island Records, Ltd. and that company's sublabel, Island Records, Inc. However, such definitions are complicated by the corporate mergers that occurred in 1989 (when Island was sold to PolyGram) and 1998 (when PolyGram merged with Universal). Island remained registered as corporations in both the United States and UK, but control of its brands changed hands multiple times as new companies were formed, diminishing the corporation's distinction as the "parent" of any sublabels.

Vanity labels

Vanity labels are labels that bear an imprint that gives the impression of an artist's ownership or control, but in fact represent a standard artist/label relationship. In such an arrangement, the artist will control nothing more than the usage of the name on the label, but may enjoy a greater say in the packaging of his or her work. An example of such a label is the Neutron label owned by ABC while at Phonogram Inc. in the UK. At one point artist Lizzie Tear (under contract with ABC themselves) appeared on the imprint, but it was devoted almost entirely to ABC's offerings and is still used for their re-releases (though Phonogram owns the masters of all the work issued on the label).

However, not all labels dedicated to particular artists are completely superficial in origin. Many artists, early in their careers, create their own labels which are later bought out by a bigger company. If this is the case it can sometimes give the artist greater freedom than if they were signed directly to the big label. There are many examples of this kind of label, such as Nothing Records, owned by Trent Reznor of Nine Inch Nails; and Morning Records, owned by the Cooper Temple Clause, who were releasing EPs for years before the company was bought by RCA.

Relationship with artists

A label typically enters into an exclusive recording contract with an artist to market the artist's recordings in return for royalties on the selling price of the recordings. Contracts may extend over short or long durations, and may or may not refer to specific recordings. Established, successful artists tend to be able to renegotiate their contracts to get terms more favorable to them, but Prince's much-publicized 1994–1996 feud with Warner Bros. Records provides a strong counterexample, [8] as does Roger McGuinn's claim, made in July 2000 before a US Senate committee, that the Byrds never received any of the royalties they had been promised for their biggest hits, "Mr. Tambourine Man" and "Turn! Turn!, Turn!". [9]

A contract either provides for the artist to deliver completed recordings to the label, or for the label to undertake the recording with the artist. For artists without a recording history, the label is often involved in selecting producers, recording studios, additional musicians, and songs to be recorded, and may supervise the output of recording sessions. For established artists, a label is usually less involved in the recording process.

The relationship between record labels and artists can be a difficult one. Many artists have had conflicts with their labels over the type of sound or songs they want to make, which can result in the artist's artwork or titles being changed before release. [10] Other artists have had their music prevented from release, or shelved. [11] Record labels generally do this because they believe that the album will sell better if the artist complies with the label's desired requests or changes. At times, the record label's decisions are prudent ones from a commercial perspective, but these decisions may frustrate artists who feel that their art is being diminished or misrepresented by such actions.

In other instances, record labels have shelved artists' albums with no intention of any promotion for the artist in question. [12] [13] Reasons for shelving can include the label deciding to focus its resources on other artists on its roster, [11] or the label undergoing a restructure where the person that signed the artist and supports the artist's vision is no longer present to advocate for the artist. [11] [14] In extreme cases, record labels can prevent the release of an artist's music for years, while also declining to release the artist from his or her contract, leaving the artist in a state of limbo. [14] [15] Artists who have had disputes with their labels over ownership and control of their music have included Taylor Swift, [16] Tinashe, [17] Megan Thee Stallion, [18] Kelly Clarkson, [19] Thirty Seconds to Mars, [20] Clipse, [21] Ciara, [22] JoJo, [15] Michelle Branch, [23] Kesha, [24] Kanye West, [25] Lupe Fiasco, [26] Paul McCartney, [27] and Johnny Cash. [28]

In the early days of the recording industry, recording labels were absolutely necessary for the success of any artist. [29] The first goal of any new artist or band was to get signed to a contract as soon as possible. In the 1940s, 1950s, and 1960s, many artists were so desperate to sign a contract with a record company that they sometimes ended up signing agreements in which they sold the rights to their recordings to the record label in perpetuity. Entertainment lawyers are usually employed by artists to discuss contract terms.

Due to advancing technology such as the Internet, the role of labels is rapidly changing, as artists are able to freely distribute their own material through online radio, peer-to-peer file sharing such as BitTorrent, and other services, at little to no cost, but with correspondingly low financial returns. Established artists, such as Nine Inch Nails, whose career was developed with major label backing, announced an end to their major label contracts, citing that the uncooperative nature of the recording industry with these new trends is hurting musicians, fans and the industry as a whole. [30] However, Nine Inch Nails later returned to working with a major label, [31] admitting that they needed the international marketing and promotional reach that a major label can provide. Radiohead also cited similar motives with the end of their contract with EMI when their album In Rainbows was released as a "pay what you want" sales model as an online download, but they also returned to a label for a conventional release. [32] Research shows that record labels still control most access to distribution. [33]

New label strategies

Computers and internet technology led to an increase in file sharing and direct-to-fan digital distribution, causing music sales to plummet in recent years. [34] Labels and organizations have had to change their strategies and the way they work with artists. New types of deals are being made with artists called "multiple rights" or "360" deals with artists. [35] [36] These types of pacts give labels rights and percentages to artist's touring, merchandising, and endorsements. In exchange for these rights, labels usually give higher advance payments to artists, have more patience with artist development, and pay higher percentages of CD sales. These 360 deals are most effective when the artist is established and has a loyal fan base. For that reason, labels now have to be more relaxed with the development of artists because longevity is the key to these types of pacts. Several artists such as Paramore, [37] Maino, and even Madonna [38] [39] have signed such types of deals.

A look at an actual 360 deal offered by Atlantic Records to an artist shows a variation of the structure. Atlantic's document offers a conventional cash advance to sign the artist, who would receive a royalty for sales after expenses were recouped. With the release of the artist's first album, however, the label has an option to pay an additional $200,000 in exchange for 30 percent of the net income from all touring, merchandise, endorsements, and fan-club fees. Atlantic would also have the right to approve the act's tour schedule, and the salaries of certain tour and merchandise sales employees hired by the artist. In addition, the label also offers the artist a 30 percent cut of the label's album profits—if any—which represents an improvement from the typical industry royalty of 15 percent. [37]

Internet and digital labels

With the Internet now being a viable source for obtaining music, netlabels have emerged. Depending on the ideals of the net label, music files from the artists may be downloaded free of charge or for a fee that is paid via PayPal or other online payment system. Some of these labels also offer hard copy CDs in addition to direct download. Digital Labels are the latest version of a 'net' label. Whereas 'net' labels were started as a free site, digital labels represent more competition for the major record labels. [40]

Open-source labels

The new century brought the phenomenon of open-source or open-content record labels. These are inspired by the free software and open source movements and the success of Linux.

Publishers as labels

In the mid-2000s, some music publishing companies began undertaking the work traditionally done by labels. The publisher Sony/ATV Music, for example, leveraged its connections within the Sony family to produce, record, distribute, and promote Elliott Yamin's debut album under a dormant Sony-owned imprint, rather than waiting for a deal with a proper label. [41]

See also

Related Research Articles

Geffen Records is an American record label established by David Geffen and owned by Universal Music Group through its Interscope Geffen A&M Records imprint.

Virgin Records British record label

Virgin Records is a record label owned by Universal Music Group. It originally founded as a British independent record label in 1972 by entrepreneurs Richard Branson, Simon Draper, Nik Powell, and musician Tom Newman. It grew to be a worldwide success over time, with the success of platinum performers Paula Abdul, Janet Jackson, Devo, Tangerine Dream, Genesis, Phil Collins, the Human League, Culture Club, Simple Minds, Lenny Kravitz, and Mike Oldfield among others, meaning that by the time it was sold, it was regarded as a major label, alongside other large international independents such as A&M and Island Records.

EMI Defunct British music recording and publishing company

EMI Group Limited was a British transnational conglomerate founded in March 1931 in London. At the time of its break-up in 2012, it was the fourth largest business group and record label conglomerate in the music industry, and was one of the "Big Four" record companies. Its labels included EMI Records, Parlophone, Virgin Records, and Capitol Records, which are now owned by other companies.

RCA Records is an American record label currently owned by Sony Music Entertainment, a subsidiary of Sony Corporation of America. It is one of Sony Music's four flagship labels, alongside RCA's former long-time rival Columbia Records; also Arista Records, and Epic Records. The label has released multiple genres of music, including pop, classical, rock, hip hop, afrobeat, electronic, R&B, blues, jazz, and country. Its name is derived from the initials of its defunct parent company, the Radio Corporation of America (RCA). RCA Records was fully acquired by Bertelsmann in 1987, making it a part of Bertelsmann Music Group (BMG) and became a part of Sony BMG Music Entertainment after the 2004 merger of BMG and Sony; it was acquired by the latter in 2008, after the dissolution of Sony/BMG and the restructuring of Sony Music. RCA Records is the corporate successor of the Victor Talking Machine Company, making it the second-oldest record label in American history, after sister label Columbia Records.

Jive Records American record label

Jive Records was an American independent record label founded by Clive Calder in 1981 as a subsidiary to the Zomba Group. In the US, the label had offices in New York City and Chicago. Jive was best known for its successes with hip hop, R&B, and dance acts in the 1980s and 1990s, along with teen pop and boy bands during the late 1990s and early 2000s.

Columbia Graphophone Company Record company in the United Kingdom

Columbia Graphophone Co. Ltd. was one of the earliest gramophone companies in the United Kingdom.

Mercury Records American record label

Mercury Records is an American record label owned by Universal Music Group. It had significant success as an independent operation in the 1940s and 1950s. Smash Records and Fontana Records were sub labels of Mercury. In the United States, it operated through Republic Records; in the United Kingdom, it was distributed by EMI Records.

Music Canada Trade organization in Canada

Music Canada is a non-profit trade organization that was founded 9 April 1963 to represent the interests of companies that record, manufacture, produce, and distribute music in Canada. It also offers benefits to some of Canada's leading independent record labels and distributors.

Jubilee Records was an American independent record label, specializing in rhythm and blues and novelty records. It was founded in New York City in 1946 by Herb Abramson. His partner was Jerry Blaine. Blaine bought Abramson's half of the company in 1947, when Abramson went on to co-found Atlantic Records with Ahmet Ertegun. The company name was Jay-Gee Recording Company, a subsidiary of the Cosnat Corporation. Cosnat was a wholesale record distributor.

Music industry Companies and individuals that create and sell music

The music industry consists of the individuals and organizations that earn money by writing songs and musical compositions, creating and selling recorded music and sheet music, presenting concerts, as well as the organizations that aid, train, represent and supply music creators. Among the many individuals and organizations that operate in the industry are: the songwriters and composers who write songs and musical compositions; the singers, musicians, conductors, and bandleaders who perform the music; the record labels, music publishers, recording studios, music producers, audio engineers, retail and digital music stores, and performance rights organizations who create and sell recorded music and sheet music; and the booking agents, promoters, music venues, road crew, and audio engineers who help organize and sell concerts.

Zomba Group of Companies Record label

The Zomba Group of Companies was a music group and division owned by and operated under Sony Music Entertainment. The division was renamed to Jive Label Group in 2009 and was placed under the RCA/Jive Label Group umbrella. In 2011, the RCA/Jive Label Group was split in half. Multiple Jive Label Group artists were moved to Epic Records while others stayed with Jive as it moved under the RCA Music Group. In October 2011 Jive Records was shut down and their artists were moved to RCA Records.

Universal Music Group Nashville is Universal Music Group's country music subsidiary. Some of the labels in this group include MCA Nashville Records, Mercury Nashville Records, Lost Highway Records, Capitol Records Nashville and EMI Records Nashville. UMG Nashville not only handles these imprints, but also manages the country music catalogues of record labels Universal Music and predecessor companies acquired over the years including ABC Records, Decca Records, Dot Records, DreamWorks Records, Kapp Records, MGM Records and Polydor Records.

Electrola German record label

Electrola is a German record label and subsidiary of Universal Music Group. Based in Munich, its roster has included Chumbawamba, Matthias Reim, Helene Fischer, Brings, Höhner and Santiano.

Minos EMI Greek music recording company

Minos EMI is a record company based in Athens, Greece. The company serves as the Greek record label and offices of the multinational Universal Music Group.

Universal Music Japan Japanese subsidiary of Universal Music Group

Universal Music LLC, often referred to as just Universal Music Japan or UMJ, is a Japanese subsidiary of the Universal Music Group founded in 1990. It is the largest subsidiary for a foreign company in the country regarding music distribution. The company is responsible for marketing and distribution in Japan for Japanese record labels under Universal.

Gaiam Vivendi Entertainment Film, television, DVD and digital distribution company

Gaiam Vivendi Entertainment is an independent film, television, DVD and digital distribution company operating in the United States and Canada. It is also a distribution partner for independent content providers.

RCA Inspiration is a gospel music group operating under Sony Music.

Universal Records (Philippines) Recording label company in the Philippines

Universal Records Philippines Inc. is a Filipino record label founded in 1977 as part of Warner Music Group. Since 1992, it is an independent label. The label is currently a member of the Philippine Association of the Record Industry.

PolyEast Records

PolyEast Records is a record label in the Philippines. It is a member of the Philippine Association of the Record Industry and from 2008 until 2013, the international licensee of EMI.

Independent record label Type of record label

An independent record label is a record label that operates without the funding or distribution of major record labels; they are a type of small- to medium-sized enterprise, or SME. The labels and artists are often represented by trade associations in their country or region, which in turn are represented by the international trade body, the Worldwide Independent Network (WIN).

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