A record label, or record company, is a brand or trademark associated with the marketing of music recordings and music videos. 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; also conducting talent scouting and development of new artists ("artists and repertoire" or "A&R"); and maintains 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]
Sound recording and reproduction is an electrical, mechanical, electronic, or digital inscription and re-creation of sound waves, such as spoken voice, singing, instrumental music, or sound effects. The two main classes of sound recording technology are analog recording and digital recording.
In the music industry, a music publisher is responsible for ensuring the songwriters and composers receive payment when their compositions are used commercially. Through an agreement called a publishing contract, a songwriter or composer "assigns" the copyright of their composition to a publishing company. In return, the company licenses compositions, helps monitor where compositions are used, collects royalties and distributes them to the composers. They also secure commissions for music and promote existing compositions to recording artists, film and television.
Manufacturing is the production of merchandise for use or sale using labour and machines, tools, chemical and biological processing, or formulation. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial design, in which raw materials are transformed into finished goods on a large scale. Such finished goods may be sold to other manufacturers for the production of other, more complex products, such as aircraft, household appliances, furniture, sports equipment or automobiles, or sold to wholesalers, who in turn sell them to retailers, who then sell them to end users and consumers.
Within the mainstream music industry, recording artists have traditionally been reliant upon record labels to broaden their consumer base, market their albums, and be both promoted and heard on music streaming services, radio, and television. Record labels provide publicists, who assist performers in gaining positive media coverage, and arrange for their merchandise to be available via stores and other media outlets.
The music industry consists of the companies and individuals that earn money by creating new songs and pieces and selling live concerts and shows, audio and video recordings, compositions and sheet music, and the organizations and associations that aid and represent music creators. Among the many individuals and organizations that operate in the industry are: the songwriters and composers who create new songs and musical pieces; the singers, musicians, conductors and bandleaders who perform the music; the companies and professionals who create and sell recorded music and/or sheet music ; and those that help organize and present live music performances.
A publicist is a person whose job is to generate and manage publicity for a company, a brand, or public figure- especially a celebrity- or for a work such as a book, film or album. Publicists are public relations specialists who have the role to maintain and represent the images of individuals, rather than representing an entire corporation or business.
But an increasing number of artists have sought to avoid costs and gain new audiences via the Internet, often with the help of videos. Combined with the decline in album sales and rapid growth in free content available online, this has changed the way the industry works dramatically since the beginning of the 21st century. It has caused record labels to seek new sources of profit, in particular via "360" deals (see below, under "new label strategies").
A music video is a short film that integrates a song with imagery, and is produced for promotional or artistic purposes. Modern music videos are primarily made and used as a marketing device intended to promote the sale of music recordings. There are also cases where songs are used in tie-in marketing campaigns that allow them to become more than just a song. Tie-ins and merchandising can be used for toys or for food or other products. Although the origins of the music video date back to musical short films that first appeared in the 1920s, they again came into prominence in the 1980s when the channel MTV based their format around the medium. Prior to the 1980s, these kinds of videos were described by various terms including "illustrated song", "filmed insert", "promotional (promo) film", "promotional clip", "promotional video", "song video", "song clip" or "film clip".
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]
An independent record label is a record label that operates without the funding of major record labels. Many artists begin their careers on independent labels.
A multinational corporation (MNC) or worldwide enterprise is a corporate organization which owns or controls production of goods or services in at least one country other than its home country. Black's Law Dictionary suggests that a company or group should be considered a multinational corporation if it derives 25% or more of its revenue from out-of-home-country operations. A multinational corporation can also be referred to as a multinational enterprise (MNE), a transnational enterprise (TNE), a transnational corporation (TNC), an international corporation, or a stateless corporation. There are subtle but real differences between these three labels, as well as multinational corporation and worldwide enterprise.
The Association of Independent Music is a non-profit trade body established in 1998 by UK independent record labels to represent the independent record sector, which constitutes approximately 30% of the UK market.
A "sublabel" is a label that is part of a larger record company but trades under a different name.
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 company, even though there is no legal business structure associated with the imprint.
An imprint of a publisher is a trade name under which it publishes a work. A single publishing company may have multiple imprints, often using the different names as brands to market works to various demographic consumer segments.
Publishing is the dissemination of literature, music, or information—the activity of making information available to the general public. In some cases, authors may be their own publishers, meaning originators and developers of content also provide media to deliver and display the content for the same. Also, the word "publisher" can refer to the individual who leads a publishing company or an imprint or to a person who owns/heads a magazine.
Record companies 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 50% profit-share agreement, aka 50-50 deal, not uncommon.[3]
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 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,[4] 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!".[5]
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 albums altered or censored in some way by the labels before they are released—songs being edited, artwork or titles being changed, etc.[citation needed] Record labels generally do this because they believe that the album will sell better if the changes are made. Often the record label's decisions are prudent ones from a commercial perspective, but this typically frustrates the artists who feels that their art is being diminished or misrepresented by such actions.
In the early days of the recording industry, recording labels were absolutely necessary for the success of any artist.[citation needed] 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.
Through the advances of the Internet the role of labels is becoming increasingly changed, as artists are able to freely distribute their own material through web radio, peer to peer file sharing such as BitTorrent, and other services, for little or no cost but with little financial return. 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 are hurting musicians, fans and the industry as a whole.[6] Nine Inch Nails later returned to working with a major label,[7] 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.[8] Research shows that record labels still control most access to distribution.[9]
New label strategies
With the advancement of the computer and technology such as the Internet, leading to an increase in file sharing and direct-to-fan digital distribution, combined with music sales plummeting in recent years,[10] 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. 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, Maino, and even Madonna 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. But 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.[11]
History
Industry consolidation
In the 1970s and 1980s, there was a phase of consolidation in the record industry that led to almost all major labels being owned by a very few multinational companies. CDs still flow through a handful of sources, with the majority of the sales going through the "big three" record labels.
Resurgence of independent labels
In the 1990s, as a result of the widespread use of home studios, consumer recording technology, and the Internet, independent labels began to become more commonplace. 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. Often 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, BKBravo (Kua and Rafi), 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.
On the punk rock scene, the DIY ethic encourages bands to self-publish and self-distribute. This approach evolved out of necessity around since the early 1980s, due to the major labels' aversion to signing the punk rock bands that spawned after the initial wave in the mid-70s. Such labels have a reputation for being fiercely uncompromising and especially unwilling to cooperate with the big record labels at all. One of the most notable and influential labels of the Do-It-Yourself attitude was SST Records, created by the band Black Flag. No labels wanted to release their material, so they simply created their own label to release not only their own material but the material of many other influential underground bands all over the country. Ian MacKaye's Dischord is often cited as a model of success in the DIY community, having survived for over thirty years with less than twelve employees at any one time.
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 are more competition for the major record labels.[12]
The new century brought the phenomenon of open-source or open-content record label. These are inspired by the free software and open source movements and the success of GNU/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.[13]
Major labels
Record labels are often under the control of a corporate umbrella organization called a "music group". A music group is typically owned by 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 1999, there were six major record labels, known as the Big Six:[citation needed]
PolyGram was merged into UMG in 1999, leaving the rest to be known as the Big Five.[citation needed]
In 2004, Sony and BMG agreed to a joint venture to create the Sony BMG label (which would be renamed Sony Music Entertainment after a 2008 merger). 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.[14][15]
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 in July 2013.[16] This left the so-called Big Three labels:
Parlophone Records Limited is a German-British major record label founded in Germany in 1896 by the Carl Lindström Company as Parlophon. The British branch of the label was founded on 8 August 1923 as The Parlophone Co. Ltd., which developed a reputation in the 1920s as a jazz label. On 5 October 1926, the Columbia Graphophone Company acquired Parlophone's business, name, and release library, and merged with the Gramophone Company on 31 March 1931 to become Electric & Musical Industries Limited (EMI). George Martin joined Parlophone in 1950 as assistant label manager, taking over as manager in 1955. Martin produced and released a mix of product, including comedy recordings of The Goons, pianist Mrs Mills, and teen idol Adam Faith.
Virgin Records Ltd. is a British record label founded by entrepreneurs Richard Branson, Simon Draper, Nik Powell, and musician Tom Newman in 1972. It grew to be a worldwide phenomenon over time, with the success of platinum performers such as George Michael, Paula Abdul, Janet Jackson, Roy Orbison, Devo, Tangerine Dream, Genesis, Keith Richards, the Human League, Culture Club, Simple Minds, Lenny Kravitz, dc Talk, the Smashing Pumpkins, Mike Oldfield, Gorillaz, and Spice Girls, among others.
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.
Elektra Records is an American major record label owned by Warner Music Group, founded in 1950 by Jac Holzman and Paul Rickolt. It played an important role in the development of contemporary folk music and rock music between the 1950s and 1970s. In 2004, it was consolidated into WMG's Atlantic Records Group. After five years of dormancy, the label was revived as an imprint of Atlantic in 2009. As of October 2018, Elektra was detached from the Atlantic Records umbrella and reorganized into Elektra Music Group, once again operating as an independently-managed frontline label of Warner Music.
Harvest Records is a British record label belonging to Capitol Music Group, originally created by EMI, active from 1969 to present.
The Australian Recording Industry Association (ARIA) is a trade group representing the Australian recording industry which was established in 1983 by six major record companies, EMI, Festival, CBS, RCA, WEA and Universal replacing the Association of Australian Record Manufacturers (AARM) which was formed in 1956. It oversees the collection, administration and distribution of music licenses and royalties.
Warner Music Group Inc. (WMG), also known as Warner Music or WEA International Inc., is an American multinational entertainment and record label conglomerate headquartered in New York City. It is one of the "big three" recording companies and the third largest in the global music industry, after Universal Music Group (UMG) and Sony Music Entertainment (SME). Formerly part of Time Warner, the company was publicly traded on the New York Stock Exchange until May 2011, when it announced its privatization and sale to Access Industries, which was completed in July 2011. With a multibillion-dollar annual turnover, WMG employs more than 3,500 people and has operations in more than 50 countries throughout the world.
Sony Music Entertainment (SME), commonly known as Sony Music, is an American global music conglomerate owned by Sony and incorporated as a general partnership of Sony Music Holdings Inc. through Sony Entertainment Inc., a subsidiary of Sony Corporation of America, which in turn is a subsidiary of the Japanese Sony Corporation. It was originally founded in 1929 as American Record Corporation and renamed as Columbia Recording Corporation in 1938, following its acquisition by the Columbia Broadcasting System. In 1966, the company was reorganized to become CBS Records, and Sony Corporation bought the company in 1988, renaming it under its current name in 1991. In 2004, Sony and Bertelsmann established a 50-50 joint venture known as Sony BMG Music Entertainment, which transferred the businesses of Sony Music and Bertelsmann Music Group into one entity. However, in 2008, Sony acquired Bertelsmann's stake, and the company reverted to the SME name shortly after; the buyout allowed Sony to acquire all of BMG's labels, and led to the dissolution of BMG, which instead relaunched as BMG Rights Management.
Independent music is music produced independently from commercial record labels or their subsidiaries, a process that may include an autonomous, do-it-yourself approach to recording and publishing. The term indie is sometimes used to describe a genre, and as a genre term, "indie" may include music that is not independently produced, and many independent music artists do not fall into a single, defined musical style or genre and create self-published music that can be categorized into diverse genres. The term ‘indie’ or ‘independent music’ can be traced back to as early as the 1920’s after it was first used to reference independent film companies but was later used as a term to classify an independent band or record producer.
The Zomba Group of Companies was a music group and division which was 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.
Festival Records was an Australian recording and publishing company founded in Sydney in 1952 and operated until 2005.
An unsigned artist, unsigned band or independent artist is a musician or musical group not under a contract with a record label. The terms are used in the music industry as a marketing technique. Bands that release their own material on self-published CDs can also be considered unsigned bands. Often unsigned bands primarily exist to perform at concerts.
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.
Maverick was an American entertainment company founded in 1992 by Madonna, Frederick DeMann, and Veronica "Ronnie" Dashev, and formerly owned and operated by Warner Music Group. It included a recording company, a film production company, book publishing, music publishing, a Latin record division, and a television production company. The first releases for the company were Madonna's 1992 coffee table publication Sex and her studio album Erotica, which were released simultaneously to great controversy.
Hong Kong Recording Industry Alliance Limited is a not-for-profit copyright management organization, formed to handle copyright issues for recording companies regarding the broadcast, public performance and relevant usage of sound recordings and music videos in Hong Kong, Macau and other territories. The founding companies included the traditional internationally recognised Big Four Recording Companies (四大唱片公司) of EMI Group, Sony Music, Universal Music (環球) and Warner Music Group (華納). The group was established in October 2008. Later in December 2010, BMA Entertainment (博美) joined HKRIA, turning the Big Four into the Big Five. While BMA is
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.
The Independent Music Companies Association is a non-profit trade body established in April 2000 to help European independent music companies represent their own agenda and promote independent music in the interests of artistic, entrepreneurial and cultural diversity. Its offices are in Brussels, Belgium.
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