All about record labels
The music companies most people are most aware of are the record labels, so they are often the first kind of companies people interested in a music business career think of. Jobs in record labels can be very exciting and rewarding, though they often involve long hours, a lot of multi-tasking, and, at the start of your career, modest wages. If you are thinking of working in a record label, here are some of the things you need to know first.
By Chris Cooke
What a record label does
Many people assume a record label is involved in every aspect of an artist’s career, but that’s not true. A label is only involved in an artist’s recorded music – ie the recording, releasing and marketing of singles and albums. In general a record company is not involved in live music, merchandising, brand endorsements or general career development – there are other companies who will work with an artist in these areas, in particular the artist’s ‘manager’, who is the one person who really is involved in every aspect of an artist’s career.
An artist’s record label is important, however, mainly because it is normally the label who makes the first significant investment into a new artist – ie puts up the cash. Most artists these days will have a manager and probably a lawyer before they sign a record deal, but it is the record label who are the first people to invest a significant sum of money in them. Arguably, without the investment a label makes in an artist’s recordings all the money that is subsequently generated in ticket sales, publishing, merchandising and brand partnerships wouldn’t be possible, certainly not on a large scale; it is the recordings funded by the record label that bring a band to public attention, and make consumers buy their products.
All this talk of investment and money might surprise you, doesn’t sound very rock n roll does it? But in many ways a record label is a kind of bank. They provide the money that enables an artist to launch their career – a sort of overdraft – and make that money back through the sale of an artist’s records. Once the overdraft is paid off the artist and label split future profits. But, crucially, if the overdraft is never paid off (ie nobody buys the records) the record label covers the loss, which is why artists would rather spend a record label’s money than take out a bank loan!
That said, don’t assume a record company is full of accountants and bankers. It stands to reason that if a record label is investing in artists they want to ensure that [a] they get the best artists, [b] those artists record the best albums and [c] they promote them in the best and most creative way. Most people in a record label are involved in those tasks, which are a little bit more creative, and may be even a bit more rock n roll, than all that talk of investment and overdrafts might sound.
What’s the difference between a record company and a record label?
Good question. The simple answer is that there isn’t one – most people use ‘record company’ and ‘record label’ to mean the same thing.
That said, it can be useful to make a distinction between the two terms. Most companies involved in recorded music have a number of divisions each with their own name, logo and ‘roster’ of artists. So in the record company EMI Music you have the divisions Parlophone, Virgin and one called EMI Records. If you are an artist with a recording deal with EMI Music, that deal will actually be with one of those divisions – so Kylie Minogue is signed to Parlophone, Kooks are signed to Virgin and Robbie Williams is signed to EMI Records.
You could say that EMI Music is the record company and Parlophone, Virgin and EMI Records are the record labels. Though some might say EMI Music is the record label and the other three are ‘imprints’ of it. It’s all semantics really, but it’s worth being aware of those divisions – because some people employed by record companies are employed specifically to work in one division/label/imprint. So it would be worth knowing which artists are signed to that division, because those are the artists whose albums you would get to work on.
Major vs Independent
The thing most people know about record labels is that there are two types: major labels and independent (or ‘indie’) labels. And some people might tell you that they’d heard all major labels are evil and corporate, and all independent labels are lovely and creatively credible. But what is the difference?
Historically a major record company was one owned by a larger entertainments group – ie a group that operates in other kinds of entertainment other than music. So, for example, SonyBMG is half owned by Sony Corp, who also have interests in TV, film, video gaming and consumer electronics companies. SonyBMG, therefore, is a major record company. However, it’s not a great definition these days because, arguably, neither EMI nor Warner, both major record companies, are actually owned by such an entertainments group. So, today, the definition is this: EMI, SonyBMG, Warner and Universal are major record companies, and every label not majority owned by one of them is independent. Not a great definition, but an accurate one.
But which is better – major or independent?
Well, major record companies are bigger, have global reach and generally access to bigger budgets. As an artist they can spend more on marketing your music, release your album in multiple countries, and exercise their influence on the media and in music retail to your advantage. As an employee, you’ll probably earn more, have more resources available to you, get to work with more and bigger artists, and have a more obvious career path. On the flipside, as artist you will be on a large roster, and may not get as much attention as you would like, and your label is more likely to put pressure on you to develop and market your album in a certain way. As an employee, you will probably only work in one specific area, eg A&R, marketing, PR, and you will probably be quite removed from the decision makers.
Independent record labels are generally smaller, will only operate in one or a few countries, and normally have tighter budgets. As an artist you will probably be guaranteed more attention, have more artistic freedom, and may benefit from the goodwill among music fans to the label itself. As an employee you will probably get involved in or at least see more aspects of the company, and are more likely to have a say in creative and commercial decisions. On the flipside, as an artist you might find your label cannot afford to stage the kind of marketing campaign you’d like, and may not have the influence or the ability to get you the press coverage needed to get your album stocked in every high street record store. As an employee, you will probably earn less but work more, and given that many indies are quite small there might not be any obvious route for quick career progression.
It’s not fair to say that major labels generally release bland mainstream music, while the indies release all the innovative and credible stuff. However, independents will generally give their artists more artistic freedom, may take bigger risks when signing new artists, and are more prone to sign niche artists who are never go to sell millions of records on the basis the label’s managers just love their music. Independents are also often quicker to respond to new music scenes, and that’s where they can often really compete with the majors.
One last point – don’t confuse the pop/rock genre people call ‘indie’ with the concept of indie labels. Many ‘indie bands’ are signed to major record companies, while many indie labels release exclusively dance music.
A changing industry
The wider music industry is changing, mainly because people are buying fewer records while the money to be made from live music, publishing, merchandising and brand partnerships is increasing. This is a problem for record companies because they have historically secured their investments in new artists – ie made back the money they shelled out in the first place and then a profit – exclusively from an artist’s record sales.
The result is that some record companies are looking to work with their artists in other areas than just recordings. Which means that the opening statement on this page – that “a label is only usually involved in an artist’s recorded music” – may soon no longer be true. What this means is that record companies are looking to recruit new people with some experience in other areas of music. Which means that if you have some live music experience – you promoted a club night at university for example – you are probably at an advantage when applying for a job at a record label.
This article is part of the unicornjobs.com guide to Working In The Music Business. Click here to go to the guide index.
