Are Record Labels Necessary?

photo cred

This is a question that I've been asking myself a lot lately. It seems clear that musicians have more access than ever before to all of the resources that record labels traditionally offer (distribution, marketing, recording facilities, design, replication). But for some reason when you look at the CMJ Charts, the new releases in Rolling Stone and Spin, on "subculture" magazines like Fader or Vice, or even in most high profile blogs and websites (Pitchfork, Stereogum, Brooklyn Vegan) they are still filled almost exclusively with "signed" bands. When a band like Clap Your Hands Say Yeah blows up with a self release it makes headlines that repetitively trumpet the "liberation of the artist in the internet age," yet these are still headline-worthy events rather than standard occurrences. Also artists like Radiohead, Nine Inch Nails, and Jill Sobule do really well with their fan-funded projects, but what is rarely mentioned is that all of these artists had the enormous help of record labels in developing their brands and cultivating their fame. Now they are able to capitalize on all of that but it still puts the record label at the core of artist viability. In this article I'm going to try and parse the continued relevance of the Record Label from the habitual reliance on it as a model for success. I believe that ultimately labels will start to look really different, and I think that figuring out why they still exist at all will help us develop a better model that connects musicians to the future of the music industry rather than the past.

(Full Disclosure: I'm working on developing a new model for my own label, but I'm writing this as a self-releasing artist, which I always have been)


So let's start out with what record labels do, and how that has changed because of digital technology...

What Labels Do: Record Labels traditionally connect artists with merchants and locations in which to sell their music both online and in stores.

Why we don't need it: Tunecore.com has basically blown this wide open with a flat fee for worldwide distribution. Within 24 hours an mp3 you record in your bedroom can be purchased on itunes around the world. So while getting your music in a Record Store is still difficult, it is increasingly irrelevant. Almost all young people discover music exclusively online, and so easy access to Digital Distribution has now made this once essential function of the label largely optional.

What Labels Do: Labels are able to offer capital for print ads, professionally designed marketing campaigns, branding and social media outreach.

Do we need that? Well, through social networking one could make an argument that you have all you need to promote a release but unless you already have a large committed networked fan base or a viral video you will still need to spend some money on marketing. This is why most musicians are wisely turning to making videos as promotion. Most "Indie PR" firms seem largely ineffectual from my end, and since they are pay to play rather than "curated" like labels, they don't seem to carry very much influence.

Recording Facilities:
What Labels Do: Labels have access to established producers and studios that are able to produce consistently high quality recordings. These resources help recreate the aesthetics of recorded sound that artists and labels have codified through decades of experience. In other words they can make records that sound like what people are used to hearing. Labels also are able to hire professional mixing and mastering engineers that make a huge difference in the final product.

What do we have: High Quality Recording technology is available for extremely cheap which means there are thousands of talented producers that have very humble resources but, with practice, can produce a product indistinguishable (by a mass audience) from a professionally produced recording. Mastering and mixing are also getting cheaper and easier though no less important.

Videos and Visual Design:
What Labels have: Labels may have established relationships with designers and artists that help design artwork, produce videos, design web sties, and style photoshoots. Most importantly Labels have capital to hire all of these people.

What we have: All of this has become more accessible through computers, cheap camera technology, and wonderful sites like cashmusic.org. Though creating something visually iconic, viral, and/or brilliant is still a high art that requires some resources.

What Labels Have: Traditionally labels were able to print massive quantities of recordings for mass consumption.

What we have: There are dozens of replication facilities that will produce as few or as many CDs or vinyl as you like. Ulitmately though the CD making businesses seem to be in trouble. They got a big boost as artists starting self-releasing but I can't see indie artists shelling out for printed CDs for much longer.

Licensing and Placement:
What Labels Have: Relationships with music supervisors, film studios, and ad agencies is one of the most important things that labels have and are working very hard to maintain. These institutions and individuals have become de-facto tastemakers for indie music. Getting your song placed on Grey's Anatomy, or an iPod commercial (Chairlift) has become the new way to "be discovered."

What we have: There are sites popping up that offer artists a chance to get licensing opportunities, but I'm not sure how well these work. I'd love to hear anecdotal evidence in the comments. My sense is that a lot of music supervisors read blogs and are constantly on the look out for "it" bands of the moment. I'm sure there are areas of licensing that are democratic, but it also really depends on who you know. If I were a music supervisor I wouldn't necessarily want to use a site where uncurated acts submit there music for a fee. It's easier to find music I like on blogs. This area seems to be where labels still might have sustainable clout.

Tour Support and Booking:
What labels have: Here's an example of the mystical power of a label. A booking agency is very unlikely to take on a totally independent act without the support of a label. But the minute you get signed to a label you'll most likely need a booking agent, even if you still have little draw. The agency will assume that your label will help you develop a good following. Also venues will take you more seriously if you are on a label they recognize.

What we have: Booking was one of the first elements of the music business to move completely online. No one sends packages any more. You send emails and based on your perceived online hype and could feasibly get a gig anywhere. Venues are often democratic, if you can get people in the door they will book you. But again, do you need the label to help you get people in the door? I find that booking is something anyone can do, but it is also one of the most time consuming jobs that takes a certain skill set and a lot persistence. Labels still give you legitimacy in the eyes of established booking agents.

The Status Quo:
What Labels Have: Seems to me that the biggest advantage that labels have (which may also be their downfall) is that they are connected in the old machine of the industry. So for instance, it would be so great to self-release and not print CDs. However magazines and radio stations still require hand mailed hard media. This means that distributing your self-release with a good chance at showing up on college radio and in music magazines is prohibitively hard for most small artists. Ultimately I guess these institutions will go online for submissions. I think part of the reason we don't know what record labels are going to be like in the future is because we don't yet know what records will be like in the future. To me the video world is the most clearly ascendant force, and perhaps a full length video (like Kanye West's Runaway) will be the standard "packaging" for a musical release.

What we have: We can decide for the future how music will be released by doing it ourselves in whatever way we want. But it might be a slow climb trying to get Spin Magazine to read your unsolicited emails.


So on looking at the list above it seems like labels offer 2 fundamental things: Resources and Status.

Resources: Resources may come in the form of money or access to some or all of the things listed above. The range is wide (but definitely don't sign to a label unless they are offering you some of those things.)

Status: The Label is still one of, if not the, most powerful curatorial force in the music industry as far as I can tell. Being signed basically means that someone has decided to put resources behind you. This is valuable to the musician undoubtedly, and useful to the writers and venues that are sifting through thousands of artists. The question I have is: Is it worth signing away 50% of your profits to gamble on whatever status you may or may not achieve through the label. Most artists take the oppurtunity to sign with a label still because "50% of something is more than 100% of nothing."

An established artist actually fundamentally shouldn't need a label. If an established artist can raise money through fans or from personal wealth he or she can do essentially everything that a label can do and then keep all of the royalties from sales and make potentially ten-fold what he or she might make from a label release. In fact an established artist that ditches the label and then goes independent might get all sorts of indie cred. This is great news for famous people, but what about artists that aren't already famous?

What I've noticed is a very specific type of artist as the new template for success. This is what I cal the Artistpreneur. The Artistpreneur is a type of Artist who is as invested in fame and success as they are in art. And these artists have been enormously successful in the current landscape of the music industry. They work tirelessly to develop their brand, promote themselves, get noticed in any way possible. They are compulsive tweeters, social networkers, bloggers, vloggers, and emailers. The proliferation of this type of Artist has opened up a new pathway to success as a musician but I would also argue that it has created its own type of homogenization. The Music Industry has been much maligned of the years for developing formulas for success that it pushes onto its artists, but I might argue that internet culture has done the same thing. Internet Culture has created an imperative to be an Artistpreneur in order succeed. "If you don't succeed it is your own fault because everyone can make a youtube video." This whole question brings me to try and understand how does the new relationship to artist success show up in culture.

In the old model of popular music the record labels functioned like gardeners who chose which seeds to plant and cultivated them carefully. The minute anything else would start to grow in the garden they would carefully prune it and claim credit for it. Right now the musical landscape is beginning to look more like a Jungle. Sure the labels are still planting, but things are growing completely out of their control. I support the jungle of culture because it means that there is more culture available and thus more cultural conversation overall. I believe culture creates nuance and intelligence in society and is crucial for an intelligent. In the jungle culture, labels' resources are becoming less valuable, but their ability to bestow status might be becoming even more important. Basically the noise floor is raising, which means that more and more artists are being heard which makes it harder to stand out. Labels help you stand out a little, but mostly only to the extent that their reputation and resources allow.

Ultimately maybe there will be a broad wiki of emerging artists that could be a democratic ladder of recognition that artists could climb. That is sort of what myspace was about 3 years ago but now myspace is a cyber ghetto and the internet is flooded with sites trying to be the home of emerging bands. Facebook has the clear opening to be that site but it's band/pages platform is a miserable failure which has caused bands to seek out other locations. It would be beautiful to see artists able to convert hard work and online presence directly into a sustainable career, but as of now lawyers, labels and managers still hold on to a lot of power. What is also missing from this conversation is the whole design of publishing and copyright law which is still stuck with dozens of out dated rules and complications. The complexity and arcaneness of these laws also keeps record labels in business.

One online platform that is missing is one that assists self releasing artists in distributing fair royalties to their collaborators and band members. If this platform existed, established artists might be more interested in working with self-releasing artists because there would be a clear system in place for them to be paid upon the success of the collaboration.

As we move forward into the internet-based future, artists will become more empowered and labels will have a looser grip on their work. Labels however, still serve the crucial function of providing status and resources, and they consistently are a key element as artists leap from struggling to successful. The traditional label model seemingly becomes less profitable by the day but artists are still dependent on them to provide the capital for their success.

We are in a clear transition period right now, and I'm hoping for an evolution of online tools that will bring a sustainable career more consistently within reach of self-releasing artists.


Anonymous said...

I think ultimately, as an artist, you have to take a step back and ask yourself what you want, and what values are important to you. Is it important to you to have a career in the sense that it supports you financially, that you don't have to have a day job? Why do you want this? What would you be willing to sacrifice, creatively or personally, in order for that to happen?

I personally, am exhausted to be an Artistpreneur, like the kind you described, which as far as I can tell, you now need to be. I've waned in that in recent years because it took such a toll on me, and eventually I came to accept that I do not possess a personality shmoozy, extroverted, self-important, and self-assured enough to work a room and have every person believe I am the next big sh*t. The people I've known who have made a dent in their careers have that personality, either naturally or they have adopted it. And I like some of them and applaud them for it, and others I feel like the process has turned them into a caricature of themselves. One thing that a label can do, albeit much less so than previously since they have fewer resources now, is be that shmoozeface for you.

I also think the last bastion where musicians can make a decent amount of money fairly is in licensing, and as you described, there's no internet-democratic way for unsigned acts to get in on that.


tweeg said...

Great post, César.

I agree that on occasion, for some artists, the resources and status that labels offer can be helpful. However, I've also found most people who run labels to be less-talented musicians merely hoping to cash in on someone else's talents. When labels are run by failed "Artistpreneurs," (great word, btw), how much faith should the signed artist actually have in the label?

In my conversations with other musicians, savvy and ambitious management is really the crucial resource that most aspiring artists can benefit from the most. A skilled manager will have established relationships with booking agencies, contacts with media outlets, and a cohesive online/social-media strategy. Everything else (high-quality music production, video production, distribution, etc) is well within the DIY reach of most musicians.

So, in my opinion, the labels that will succeed in the present and in the future will be the ones that have the most skills in artist management. They will by necessity be small and intimate affairs where close relationships will enable quick communication and decision making.

With this kind of label, though, revenue models will be tricky - who gets paid for what? There's no reason that a label should get paid for a CD sale at a local show that a band booked themselves, if the band also made the CD themselves. Tour money pretty slim - gas and vehicles are expensive. As you point out, licensing for TV / advertisements / etc. are the holy grail these days - there's real money involved, and there's a good case why both a label and an artist should be compensated.

Jhonny Nicolas said...

Record Labels are not necessary. Personaly having the title of being signed with a record label looks great,even if the Record Label isn't as big as others. But All the things a Record Label can do for an artist, the artist can do him or herself. Only difference is now the arist is going to have give a percentage of their profit to the Label. While if they did it on their own, they can keep all their profits.

Kiara Mudd said...

I think it is not needed to have a record label for marketing, video/video effects or recording facilities because back when record labels were more relevant the internet and certain technological advances were not here. People can make a small studio by their own expense now. The internet makes it possible for these songs that are recorded in those studios to become viral worldwide. Also since video cameras are cheaper people can make their own music videos with a cheap video editing software. Touring and booking should not be a problem when people worldwide have been buying your music and your videos have gave you a fan base. The only thing I can think that people might want a record label for is understanding copyrights and licensing. It is very confusing and you can get in a lot of trouble if you don't know anything about the laws. With a record label, you will have more assurance that they know what they are doing when it comes to that. Other than that, Record Labels are stealing your well earned money.

Bryan T. said...

Are the major record labels necessary for the success of an artist? No. But do they offer unique opportunity that being independent cannot replicate? Yes.

As it stands now, the real advantage that major record labels, have over everyone trying to succeed on their own, is marketing and promotion. No person on their on, can replicate the type of media attention and promotion that a major record label can provide for you.

Creating the music is easy, but getting your name out there and creating a buzz is the most difficult part of being an independent artist. The independent scene is so cluttered with people doing the same thing you are doing, it can be difficult to stand out Being signed to a major label, whether talented or not, gives an artist instant notoriety across the nation, whether that is justified or not.

Another huge advantage majors still hold, is the ability to distribute your records in places that an independent artist might not have access to.

Yes, we can promote ourselves and distribute music online through services like TuneCore, AdalgmDigital etc. but until there is way to market and promote efficiently while not costing an arm and a leg, and be able to get our records in stores at the click of the button, major labels will hold the upper hand in the music industry for the foreseeable future.

PeterWells said...

Nice work, César! If there's an element I want to highlight, it's EDUCATION. Artist placing their music into stores are engaging in the business of music, like it or not. They need to know their rights, the laws, and how it all comes together. It's one of the reasons education is so important to us.

Even if you don't use TuneCore, please check out these booklets:


They're free downloadable .PDF files full of great information on everything from how distribution works to how to safely do a cover of another artist's work.

Thanks again, and feel free to write me with any questions.