Record label facts for kids

A record label is a company that helps musicians create and sell their music. Think of it as a brand or trademark for music recordings and music videos. Record labels do many things: they help produce music, make CDs or digital files, distribute music to stores and streaming services, and promote artists. They also look for new talent and sign contracts with musicians. The name "record label" comes from the round sticker in the middle of old vinyl records, which showed the company's name.

In the music world, artists often work with record labels to reach more fans. Labels help market albums and promote songs on streaming platforms, radio, and TV. They also provide publicists who help artists get good media attention.

Big Music Companies vs. Independent Labels

Record labels can be small, local, and "independent" (often called "indie" labels). Or, they can be part of huge international companies. There are three main "major" record labels that control a big part of the world's music market: Universal Music Group, Sony Music, and Warner Music Group. Together, these three companies control about 65-70% of the global music market.

The Big Three Major Labels Today

Major Labels in the Past

Big record labels are often part of even larger "music groups." These music groups are usually owned by huge international companies that also have businesses outside of music. A music group can control music publishing companies, record makers, distributors, and record labels.

From 1929 to 1998, there were six major record labels, known as the "Big Six":

• Warner Music Group
• EMI
• Sony Music (called CBS Records until 1991)
• BMG
• Universal Music Group (called MCA Music until 1996)
• PolyGram

In 1999, PolyGram joined Universal Music Group, leaving five major labels, known as the "Big Five." Then, in 2004, Sony and BMG combined their music recording parts to create Sony BMG. This left four major labels, called the "Big Four." By 2007, these four controlled about 70% of the world's music market.

In 2012, parts of EMI were sold off. Most of EMI's music recording business went to Universal Music Group. Other parts, like Parlophone and Virgin Classics, went to Warner Music Group. This led to the "Big Three" labels we have today.

Independent Labels

Record labels and music publishers that are not controlled by the "Big Three" are usually called independent or indie labels. This is true even if they are large companies themselves. The term indie label sometimes refers only to labels that are truly small and follow independent business rules.

Independent labels are often seen as more friendly to artists. While they might not sell as much music as major labels, indie labels often give artists a bigger share of the profits. Sometimes, artists even own these independent labels. Their goal is often to make sure the music stays true to the artist's vision. Indie labels usually don't have as many resources as the "Big Three," so their market share is smaller. However, independent artists can still make money because their production costs are much lower.

Sometimes, famous artists, after their contracts with major labels end, move to an independent label. This gives them the benefit of being well-known while having more control over their music and earning more money. Artists like Dolly Parton, Aimee Mann, and Prince have done this.

Some independent labels become so successful that major record companies either agree to distribute their music or buy the label completely. When this happens, the independent label might become a special brand or "imprint" under the major company.

Imprints

An imprint is like a brand name or trademark used by a record company, but it's not a separate company itself. A record company might use an imprint to market a specific type of music, like jazz, blues, or country music. For example, a big label might have an imprint just for rock music.

How Labels Work with Artists

When an artist and a label want to work together, they usually sign a contract. Artists might send their music (a demo) to a label, or the label's talent scouts might find the artist.

A label typically signs an exclusive recording contract with an artist. This means the label has the right to sell the artist's music. In return, the artist gets paid a percentage of the sales, called royalties. Contracts can be short or long. Famous artists can often negotiate better deals.

For new artists, the label is often very involved. They might help choose producers, recording studios, other musicians, and even songs. For established artists, the label is usually less involved in the actual recording process.

The relationship between labels and artists can sometimes be difficult. Artists and labels might disagree about the style of music or the songs to release. Labels sometimes change an artist's artwork or titles before release. They do this because they believe it will help the album sell better. While these decisions can be good for business, they can frustrate artists who feel their art is being changed.

Sometimes, labels might even stop an artist's music from being released, or "shelf" it. This can happen if the label decides to focus on other artists or if there's a change in staff. In extreme cases, labels can prevent music from being released for years, while also not letting the artist out of their contract. This leaves the artist stuck. Artists like Taylor Swift, Kanye West, and Johnny Cash have had disagreements with their labels over who owns and controls their music.

In the past, record labels were absolutely necessary for an artist's success. New artists wanted to sign a contract as soon as possible. In the mid-1900s, many artists were so eager that they sometimes signed deals where they gave away the rights to their recordings forever. Today, artists often hire lawyers to help them understand contract terms.

Thanks to new technology like the Internet, the role of labels is changing fast. Artists can now share their music directly with fans through online radio, file sharing, and other services. This costs little or no money, but also means less money for the artist. Even famous artists like Nine Inch Nails have ended their contracts with major labels, saying that the old music industry wasn't working well with new trends. However, Nine Inch Nails later returned to working with a major label, realizing they needed the label's help to promote their music worldwide.

New Ways Labels Work

Computers and the internet have led to more file sharing and direct ways for artists to reach fans. This caused music sales to drop. So, labels have had to change how they work with artists. New types of deals, called "multiple rights" or "360 deals," are now common. In these deals, labels get a percentage of an artist's touring, merchandise, and endorsements. In return, labels usually give artists more money upfront, are more patient with developing artists, and pay a higher percentage of CD sales. These 360 deals work best for artists who are already well-known and have loyal fans.

For example, a 360 deal might offer an artist money to sign. The artist would get royalties from sales after the label makes back its money. But with the first album, the label might pay more money in exchange for 30% of the artist's earnings from tours, merchandise, and fan clubs. The label might also have a say in the artist's tour schedule. In return, the artist might get a higher percentage of album profits from the label.

Internet and Digital Labels

With the internet being a major way to get music, "netlabels" have appeared. Depending on the netlabel's goals, music files might be free to download or cost a small fee. Some of these labels also offer physical CDs. Digital labels are a newer version of netlabels and compete more directly with major record labels.

Open-Source Labels

The new century also brought "open-source" or "open-content" record labels. These are inspired by the idea of free software and sharing, like the Linux operating system.

Crowdfunded Labels

In 2002, ArtistShare started as the first record label where artists' fans directly funded the music releases. This means fans contribute money to help artists create their music.

See also

• List of record labels
• Streaming media
• White label

Images for kids

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  Logo of Universal Music Group

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  Logo of Sony Music Entertainment

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  Logo of Warner Music Group