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, 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 be both promoted and heard on music 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.
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 products 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.
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.
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.
A corporate group or group of companies is a collection of parent and subsidiary corporations that function as a single economic entity through a common source of control. The concept of a group is frequently used in tax law, accounting and company law to attribute the rights and duties of one member of the group to another or the whole. If the corporations are engaged in entirely different businesses, the group is called a conglomerate. The forming of corporate groups usually involves consolidation via mergers and acquisitions, although the group concept focuses on the instances in which the merged and acquired corporate entities remain in existence rather than the instances in which they are dissolved by the parent. The group may be owned by a holding company which may have no actual operations.
A conglomerate is a combination of multiple business entities operating in entirely different industries under one corporate group, usually involving a parent company and many subsidiaries. Often, a conglomerate is a multi-industry company. Conglomerates are often large and multinational.
A holding company is a company that owns other companies' outstanding stock. A holding company usually does not produce goods or services itself; rather, its purpose is to own shares of other companies to form a corporate group. Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies.
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.[3][4]
Sony BMG Music Entertainment was an American record company owned as a 50–50 joint venture between Sony Corporation of America and Bertelsmann Music Group. The venture's successor, the revived Sony Music Entertainment, is wholly owned by Sony, following their buyout of the remaining 50% held by Bertelsmann AG. BMG was instead rebuilt as BMG Rights Management on the basis of 200 remaining artists.
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.[5] This left the so-called Big Three labels:
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 a 50% profit-share agreement, aka 50-50 deal, not uncommon.[6] 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, 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.
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.
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. My Ami is the early imprint of Columbia records.
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,[7] 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!".[8]
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 these decisions may frustrate artists who feel 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 is hurting musicians, fans and the industry as a whole.[9] However, Nine Inch Nails later returned to working with a major label,[10] 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.[11] Research shows that record labels still control most access to distribution.[12]
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,[13] 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. 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.[14]
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.[15]
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 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.[16]
Parlophone Records Limited is a German-British record label founded in Germany in 1896 by the Carl Lindström Company as Parlophon. The British branch of the company was founded in 8 August 1923 as The Parlophone Company Limited , which developed a reputation in the 1920s as a jazz record label. On 5 October 1926, the Columbia Graphophone Company acquired Parlophone's business, name, logo, and release library, and merged with the Gramophone Company on 31 March 1931 to become Electric & Musical Industries Limited (EMI). George Martin joined EMI 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 a major American record label owned by Warner Music Group, founded in December 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.
Universal Music Group is an American global music corporation that is a subsidiary of the French media conglomerate Vivendi. UMG's global corporate headquarters are located in Santa Monica, California. It is considered one of the "Big Three" record labels, along with Sony Music and Warner Music Group. Since 2004, the corporation is no longer related to the film studio Universal Studios.
Warner Music Group Inc. (WMG), also known as Warner Music, 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.
EMI Classics was a record label founded by EMI in 1990 in order to reduce the need to create country-specific packaging and catalogs for internationally distributed classical music releases. Following the European Commission's approval of the takeover of EMI Group by Universal Music in September 2012, EMI Classics was listed for divestment. The label was sold to Warner Music Group, which absorbed EMI Classics into Warner Classics in 2013.
Word Entertainment is a Christian faith-based entertainment company based in Nashville, Tennessee. It is owned by Curb Records. Word Entertainment represents Francesca Battistelli, for King & Country, Switchfoot, Skillet, Sidewalk Prophets, Chris August, Big Daddy Weave, in addition to many others, and is home to Word Distribution, 25 Live, Word Music Publishing and Word Label Group's Word Records and Fervent Records.
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 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.
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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