According to our friends at How Stuff Works:
A record label is a brand and a trademark associated with the marketing of music recordings and music videos. Most commonly, a record label is the company that manages such brands and trademarks, coordinates the production, manufacture, distribution, marketing and promotion, and enforcement of copyright protection of 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. Record labels come in all sizes, from small independent labels run by one or two people to huge corporations made up of hundreds of people in dozens of departments.
So what does all of this mean? Simply said - record labels come in all shapes and sizes and they help offset costs, assist in marketing, and most importantly assist in a lot of the legal aspects of the music biz.
It would be a good idea to understand the makings of a record label
Historically, record labels have always played a large part in a music artist’s career. Artists generally work extremely hard harvesting their talent in efforts to get signed by a “label”, but then what? Have you seen or perhaps know someone who has signed a deal with a label? What exactly does that mean (signed a deal) and how come everyone that is signed with a label is not a super star like other signed talents? Remember from the definition above that record labels come in all shapes and sizes. This along with other factors has a significant impact on the available resources that may be needed by that label in order to successful propel their artist to the mainstream.
Before we dig deeper let’s take a look at the types of record labels that exist:
Record labels are often under the control of a corporate umbrella organization called a music group.. A music group controls and consists of music publishing companies, record (sound recording) manufacturers, record distributors, and record labels. As of 2005, the "big four" music groups control about 70% of the world music market, and about 80% of the United States music market.
- Independent Label (Indie):
Record companies and music publishers that are not under the control of the big four 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 arbitrary, ill-defined 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.
- Online Distribution & Net Labels:
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.
Now that we have a slightly better understanding of what a record label are, what some of their responsibilities are , and some of the various types of labels that exist, we can start to seriously evaluate whether or not they are needed by music artists. With the advancements in online technology, social networking, and digital downloading, the music industry has been forever changed. Marketing, distribution, and fan outreach has been revolutionized. One can be argue that, with the emergence of Facebook, Myspace, Twitter, & other social media, artists no longer have a need for signing with a record label. In the past, record labels were sought out for their resources and large networking capacities. With the huge breakthroughs in social media, music artists can now establish a direct dialogue with their fans and create a comprehensive online marketing campaign with little to no help.
So does all of this mean that there is no need to work toward signing a deal with a record company? Not really, this is just encouraging news to music artists of all genres. Music artists now have more resources available to them than ever before. If you are a music artist and have not landed a lucrative record deal yet, your excitement should still remain high. Indie labels have made huge advancements and have gathered a larger piece of the music market pie. Look to hook up with indie labels and launch a concentrated marketing campaign. Your resources are unlimited!