With the rise of distribution websites such as Distrokid and Horus music making it easier for artists to go the independent route, I’m seeing more conversation these days surrounding the independent vs major label debate. While there’s value to being signed to a major label, their reputation for shady business practices and giving artists the short end of the deal are leaving many to consider working with an independent label or setting up their own.

While the internet has opened power structures and given artists the chance to break out on their own, it also means that artists are now expected to take on more roles than ever before. From managing themselves, to doing their own branding, style, photography, social media presence, video editing, recording, releasing their music and everything in between. This is where arguments can come out in favour of the major labels, which take care of everything for the artist except for the music itself.

There’s no doubt about it that the independent hustle requires hard work and determination, but if you’ve got what it takes, then the reward comes in the form of ownership, creative control & freedom to make your own career decisions.

For this list, I’ve decided to write about the key functions of a record label and the roles within them, to help young artists and creatives to understand what goes into running a record label. This should help people to understand the roles required to run a successful music company and the roles they and the people on their team will have to handle if they are thinking about running their own.

A&R (Artist & Repertoire)

The A&R is typically the person who finds new talent for the record label. While the role can cross over into other territory such as choosing what songs are going to be recorded and what producers the artist should work with, the main focus of the A&R is to seek new artists for the label.

It should be noted that while A&R’s do go out to hear new music and listen for demos, A&R’s generally do not listen to music that gets sent to them. So sending music to A&R’s is not a good use of your energy. In fact, I have even heard stories of people at record labels listening to demos that get sent to them for the purpose of stealing melodies and song ideas, not for the purpose of finding new talent to sign. If you are trying to get noticed by a record label, the way to do it these days is by building a noticeable presence on social media and in your nearest city’s music scene.

Business Affairs & Legal Departments

Considered one department in some record companies while separated into business & legal divisions in others, there is one thing for sure and that is that the music business is built around contracts. Professional legal advice is important when navigating the music industry, but for artists on an independent level who are starting out, a basic understanding of common contract types are fundamental. You need to understand what to look for in deals to make sure that you are getting paid fairly and an understanding of split sheets and publishing will help you to make sure you are credited correctly for your work. In fact, many working artists will not want to work with an other artist who doesn’t want to sign split sheets as it indicates that they are not serious enough about what they are doing or are likely to try to take a larger portion of the credit than was informally agreed on. Unfortunately, this happens and people not getting credited for their work in the music industry is a common occurrence.

Artists have to be aware of what they are signing because at the end of the day the music business is full of people trying to take the best side of the deal whether it’s fair or not and some will use legal fine print to do it. At the end of the day, the law when used correctly should be used in the favour of both parties to ensure a fair deal is made which is mutually beneficial and documented as proof of the original deal.

Sales, Merchandising and Distribution

These are sometimes separate departments depending on the record label, but the main function here is to distribute physical units and market projects. Major labels sometimes have their own manufacturing plants or they are run by a subsidiary company and labels have been known to share distribution types, for example, one manufacturing CD’s and one manufacturing vinyl.

For smaller record labels, there are manufacturing & distribution companies that hire out their services. Distributing music online to streaming services can be done for a very low cost and is easy to do these days. Artists can now thrive almost entirely on digital streams and downloads, but CD’s and Vinyl still remain a good investment as merchandise for independent artists who are building up a fanbase. Music fans still buy CD’s and they are a good commodity to have available to sell at shows. Vinyl records have been on the rise in recent years as people are going back to the warm & clear sound of music being played straight from the needle to the speaker, so this is a good thing to keep in mind as your fanbase grows.

With this said, I should say that I don’t recommend artists invest in having physical products manufactured until they know there is a significant interest for it. Going for digital releases is a much easier and financially low risk method for small labels and there’s nothing wrong with this as most people will be able to hear your music online though streaming services. Also, where serious music fans still value the physical format, the general public simply doesn’t have the need to buy physical copies of records like they used to.

This is something we need to consider. While every artist wants to see their vision come to life in an album format that can be held in the hands, there is a reason why record labels are trying to survive by dipping their hands into different revenue streams (such as 360 deals) and that is quite simply because people do not buy records as much as they used to, which endangers the whole business model. There is still money to be made in the music industry, but it is important for artists and entrepreneurs to understand other revenue streams and not have their mind set on outdated ways of thinking.

Art & Editorial

Sometimes collectively known as Creative Services, the Art Department is responsible for overseeing the art direction of records and outsourcing the artists to commission for them if necessary. The Editorial Department is used for writing liner notes in the album sleeves and for writing promotional pieces.

Promotion

The cost of promoting a record can often outweigh the cost of recording and producing it, which tells you how important this department is. The job of the promotion department is fundamentally to get the record played on the radio and streaming playlists, as every time a song is played, this creates free advertising for the artist. Although it has many shared roles with the Sales department, this is usually its own department and there can be further divisions of this department based on genre and territory.

Depending on the legal status of payola in the territory being worked in, an independent company may be recruited to run advertising or even to run whole marketing campaigns on behalf of the record company.

Publicity

The job of the Publicity department is to obtain free advertising for the artist. This may be by contacting magazines, sending press copies of albums for review, contacting radio stations & blogs to ask for interviews and so on. As a general rule, the main difference between Promotion and Publicity is that Publicity is free and Promotion is paid for. This means that Publicity looks for free advertising and Promotion looks for the best way to spend money on paid advertising.

Artist Relations

in short, the job of Artist Relations is to keep the artists happy. This can be relaying information and sorting out affairs between the artist and the company, as well as making sure the artist has their favourite food and drink available backstage, pampering them, booking them a spa session after a stressful week and so on. Sometimes this is done by the A&R department or Publicity but some companies also have a separate department.

Obviously, Independent companies don’t have the same luxuries as the majors, but looking after the happiness and wellbeing of artists is always important for allowing them to make the best music they can make, and making them want to continue doing business with you. So it’s important that anyone looking to work the independent music hustle has a genuine care for artists and is willing to go out of their way to build a support network for their artists.

Licensing, Accounting and Royalties

Like any other company, all profits, expenses and transactions have to be accounted for. These departments also deal with paying royalties to artists, publishing companies, production companies, producers, other record labels and so on. They also licence music to be released.

These jobs are sometimes handled by other departments as well, such as A&R or Business Affairs, but as with other roles, this can be dependant on the size and scope of the record company.

Special Products & Licensing

A department specially dedicated to making as much money out of a product as possible. Deluxe editions, repackaging, T-Shirts, posters & licensing to other media for extra promotion. If the record company is not licencing merchandising rights out to an external company, this is the department that handles will handle merchandising in house.

International

This department is responsible for finding releasing product in foreign territories and where necessary, licencing foreign product to be released domestically. With most of the major record companies now having merged together this is usually an internal affair between departments.

Publishing

Publishing companies are usually separate entities from record companies, and many independent artists run their own publishing companies. However, record companies often have affiliated publishing companies which collect royalties for their artists. The job of publishing companies is to acquire and create copyright ownership of musical compositions, then collect the revenue generated from public performances, radio and synchronisation placements. This will then be split between the publishing companies and the artists. A publishing company can only be affiliated with one of the 3 major performance rights societies (ASCAP, BMI and SESAC), so a record company will usually have separate affiliated publishing companies dealing with each one. Even though the legal fiction of the corporate entities are separate, they will probably have the same personnel working in each one.

Conclusion

We can see that there is a huge amount of work that goes in to managing a successful record company, and these are things to think about when understanding the music industry. Luckily for independent artists, the manufacturing of physical records is no longer necessary to get your music out to people and heard by people. This is shifting the balance away from the majors and putting control back into the hands of the artists. Without the need for manufacturing and planning worldwide releases, this allows the artist to concentrate on music, promotion and live shows. Also, artists can generate a profit online from streams and downloads without having to work out a publishing deal, and they can focus on this later when they need this to progress their career.

While musicians still dream of being signed to a major label, it’s important to remember that most of the artists who get signed end up tied in contract to the label without releasing any music. This is a situation that binds the artist from releasing music rather than helping their career. It’s up to the artist to consider what will be the best route for them to take and remember that record labels only release music if they are sure that there will be profit made on their financial investment, which comes from seeing the artist has a large fan base and seeing that the artist makes music that fits the mould of current trends and fashions, or a specific demographic they know how to capitalize on.

I hope this helps give you some more understanding of the music industry, in future articles I’ll be looking more at roles that young artists can learn to fill to help build their career and the careers of those around them.  

Thanks for reading,

Peace & prosperity.

– Bobby Bey.