Do you ever turn on the radio, hear a song from an indie artist you love, and wonder how they make a living from music? Since the music industry started in the 19th century with vinyl records and popular artists, record labels controlled most of where music was produced and distributed. They had all the connections an upcoming artist needed to get their foot in the door and into the limelight. Artists have had it hard since the beginning, but with the development of more innovative ways to listen to music, we have seen more and greater artists come to fruition with the emergence of a digital era.
St. Louis Volunteer Lawyers and Accountants for the Arts says, “For decades, labels acted as the gatekeepers of music in exchange for owning master recordings and controlling the fate of artists. In return for having a label behind their names, many artists sign away long-term rights to their creative output, giving up their freedom to the labels.” Record labels allow the connection between the artist and the production of their music. Joel Gouvea’s “Death of the Record Deal” highlights how prominent it was to make a deal with a record label. Gouvea says, “The traditional record label did five things for an artist: distribution, marketing, radio, A&R, and touring support.”
With the way labels were set up, an artist would have to pay a lot of money to record with a studio of their chosing or rely on the record label’s decisions. Production would take days, even weeks, before an album is finished. Payment for artists would be 15% to 25% of the royalties, while the label would get the rest for distribution and promotion. Soundcharts explains why record labels used their system, “Labels manage the logistics that many artists cannot (or do not want to) handle alone. This includes everything from covering recording costs to setting up marketing campaigns, facilitating sync licensing, and securing playlist placements. Labels also manage copyrights, negotiate deals, and—in the case of majors—invest heavily in international artist development.”
With the current increase of technology, streaming, and digital products, record labels’ influence has dwindled, and studio recording has been left in the past. Apple Music, Spotify, Pandora, and other music streaming apps allow artists to publish music onto their platform with third-party distributors. Streaming services pay out 80% to 90% of the revenue to the artists when their song is played for each count of listeners. Musician Guidance tells us where record labels are headed, “The future of record labels lies in their ability to adapt to the changing dynamics of the industry, prioritizing the long-term potential of artists and embracing new ways to support and promote talent. The collapse of record labels, as we once knew them, may be inevitable, but their complete disappearance is unlikely if they continue to innovate and find new avenues to add value in the music ecosystem.” For small-time artists or those who want to create music, people have leaned toward creating their own home studios to produce their music and share it without needing a lot of money for record label deals or big recording studios.
A new era for the music industry has slowly shifted from analog to digital with online access and streaming, inspiring upcoming artists, where anyone can produce music without a big-time recording studio or record label to carry them. The change in distribution, marketing, and monetization for the music industry has altered how artists get their money and gain recognition. These advancements in digitization and the adaptation of the music industry have played a role in how our generation and future generations to come will be influenced.
