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The record company

The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free and good men die like dogs. There’s also a negative side.
–Hunter S. Thompson (journalist & author)

The record companies, often also called the labels, are the most important players in the industry. They’re not only the biggest players, but they’re also the ones that decide what kind of music and what artists will be pushed and promoted.

They decide – in cooperation with magazines, blogs, radio, and TV – what’s cool and what’s not, they’re the puppeteers of the mainstream, and they finally also control the artists.

Wikipedia has a nice paragraph describing the activities of a record company, so I’ll cite them:

A record label is a brand or trademark associated with the marketing of music recordings and music videos. Often, 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; conducts 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.

Many artists are dreaming of getting signed by a record label, which means that they want to get a deal with a record company that will then pay for their recordings and take over promotion and distribution. While getting a deal may look like a good plan, it also has many downsides. I already mentioned that, and you will soon learn more about the many problems you’ll have to face after getting signed by a label.

Today there are three “major labels” – those are the really big companies.

Originally there were five, in the 1990s there were even six of them, but the number diminished though mergers to four in the 2000s, until only three of them were left. Maybe those will merge once more, or maybe they will even be taken over by tech companies one day, we’ll see. The three big ones – the so-called majors – are:

  1. Warner Music Group (US-owned)
  2. Universal Music Group (French-owned)
  3. Sony Music Entertainment (Japanese-owned)

Smaller labels are called “independent labels”, and those are in fact generally a lot smaller than the three big ones.

While many of those smaller labels are truly independent and / or privately owned, larger record companies often have a highly complex structure. Not all small labels are really independent though, and some are again owned by larger ones. If you need more information on a specific label, then google it.

Finally there are also the completely irrelevant labels.

Everyone may start a record label in fact, and there are tons of record labels owned by crazy dickheads who don’t know anything about the business and whose sales numbers are somewhere around zero.

Be very careful not to sign a deal with such a record label, especially if the label is asking you to pay for your own record that shall, of course, be recorded in their crappy studio. This is a quite popular form of scam in the music industry, your deal is worth nothing and you’ll pay for everything, while not even keeping your rights. So be careful please.

If you will get a record deal at some point, then it will probably be one with an independent label, and the advantage will be that those labels often allow for more freedom and they care a bit more about their artists than the majors.

Independent labels take nothing and make something out of it. Major labels buy that something, and try to make more out of it.
–Tom Silverman (Tommy Boy Records CEO)

If you make good music, then chances to get signed by an independent label specialized in your genre or subgenre are much higher than getting signed by a major label.

The problem of smaller labels is, of course, that their budgets are very limited and they cannot sign a larger number of artists, so you’ll have to do a really good job in order to convince them that you will be the next big thing. By following the recommendations in this manual, your chances will be a lot higher by the way.

Getting an instant deal with a major label is possible too, but only if you really kick off on YouTube, or if you have some kind of a direct link to one of their A&R execs for example. Many artists are dreaming of getting signed by a major company of course, but be warned that nowadays it will be very hard to get a record deal with one of them if you’re not following mainstream chart trends.

Major record companies mostly focus on making music for the masses, and if you don’t sound like Katy Perry or other Top 40 chart music, then they’ll never sign you unless you already are an established artist. 

Getting a deal with a (major) label before you’re a fully established artist can be a very risky endeavour, as they will try to push you into a mainstream direction which may finally destroy your entire career.

My final recommendation will be to make it on your own as long as possible, without the help of any record company, as this may allow you to become a relevant and established artist first, which again will put you in a much better position as soon as you may have to sign a deal later on.

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Chapter 2.2   •   Page 2 of 11

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