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What Do Record Labels Do?

| January 19, 2022

In 2022, the majority of music is consumed via streaming services like Spotify, Apple Music and Soundcloud. At the end of 2021, a study by NME estimated that a staggering 83% of music consumed in the UK last year was streamed. With streaming services dominating the industry and anyone with an artist account being able to upload their music, this raises the question: what do record labels actually doing today? They aren’t pressing records like they used to, or manufacturing CDs or cassettes. The role of the record label in the music industry has taken on a new form in the age of digital streaming. So, let’s look at the other functions of record labels, whether artists really need them, and the important role of independent record labels in the music industry.

What Does a Record Label Do?

The primary function of a record label today is to produce revenue from the recordings of artists who are signed to the label, both for the artists and the label. They do this through physical and digital sales of music, royalties from copyright and by selling merchandise and tickets for gigs.

Financing

To be able to sell music and all its associated products, labels obviously need albums, EPs and singles to manufacture, market and distribute. So one key activity of record labels is to finance projects – providing funding and loans for artists to be able to record their music. Labels can give access to studios, producers, sound engineers or music equipment or give loans to cover this. Labels are important in allowing artists to be able to afford to produce a record as many artists wouldn’t have this sort of money upfront. It means artists can use expensive equipment like high end synthesisers and industry standard recording gear and mixers to make their tracks without having to own it outright.

Networking

Alongside their financing function, another key benefit of established record labels is the connections they have within the industry. Labels can enable collaborations between different artists on their roster and with industry renowned producers or session musicians to feature in artists’ recordings. Sadly, within the music industry, sometimes it is not what you know but who you know, so being signed to a label can give artists access to skilled professionals within the industry, offering them new opportunities that otherwise would not be available to them. This is primarily why record labels are still relevant in today’s digital age.

We’re in an age where making and producing music is more accessible than ever. Due to programmes like Ableton and Logic, people can now produce their own music from their laptops and when the track is finished, they can upload it to Spotify, SoundCloud and Bandcamp at the click of a button through distribution platforms such as Distrokid. Record labels used to be the only way artists could get copies of their music to listeners but now in the age of streaming this isn’t the case. So, with advances in technology, maybe labels aren’t as necessary. But their value in connecting artists with new opportunities with other creators or live performances remains important.

Organising tours

Another function record labels fulfill is helping artists organise tours, labels can have links with existing labels and put together road crews and all the equipment. Nevertheless, it’s possible for artists to put on their own tours. GIRLI a bubble-gum pop singer songwriter from London organised her own major tour in the autumn of 2021. She organised her own merch, venues and team, pulling off a UK-wide tour without the support of a record label. It’s possible to do but it’s an incredible amount of work for just one person or band. Successful tours like this also rely, as all tours do, on a cultivated loyal fanbase. This brings us to perhaps the most important function of a record label which is promotion.

Promotion

To generate the most revenue, record labels market their affiliated artists, to generate more interest in the artist, increase their popularity, and boost revenue streams. They do this in a variety of ways from posters and billboards and social media advertising but also through music PR, including interviews in magazines, blogs, and on radio and TV. All this helps to boost popularity of artists creating a wider audience and consequently a wider base of consumers. This helps record labels generate profit, but also boosts the earnings of artists. Promotion and marketing are a huge part of what record labels do – so big, in fact, that there are now separate promotional companies being set up to work with artists and labels. The company Underplay, established in 2016, functions to promote artists and their music through TV, radio and other platforms using connections the founder, Chris Bellham, built up throughout his career in the industry. Companies like Underplay will start to dominate a larger part of the industry, with labels and artists working with promotional companies instead of trying to do it all themselves. Underplay has worked with the likes of 4AD, Rough Trade, Ninja Tune and Warp showing that renowned labels such as these are somewhat outsourcing the task of promotion.

The Problem With Record Labels

We’ve established that record labels still have a function in today’s music industry, but it’s important to address how some corporate labels can be exploitative of artists. Some labels are renowned for offering excessively long contracts, demanding albums by certain dates, and long tours all whilst taking a large cut of revenues. To some labels, artists are viewed as little more than commodities, and artists are left with little room to negotiate. If they want access to the funding and network of connections big labels have, they have little choice. Fundamentally, being signed to a label can allow artists to have some level of financial security whilst in the terms of their contract. Sometimes artists are salaried whilst they are creating and writing their music, so signing to a record label allows artists to focus on music full time without the worry about where their next paycheck is coming. This is a big factor at play today. Artists need money to keep doing what they’re doing – they have rent to pay and groceries to buy like we all do – so having some sort of financial security is vital.

Although major record labels carry a certain prestige, a lot of artists dislike working with major record labels due to their exploitative nature and large cut of the profits so opt for independent record labels who are in general more favourable toward artists. 

What Is an Independent Record Label?

Independent record labels are any labels not owned by the major 3 conglomerates who dominate around 85% of the industry worldwide: Sony Music Entertainment, Warner Music Group and Universal Music Group. So independent record labels can range from small labels to bigger ones like Rough Trade, Domino Records and Warp (which might seem, to some, to be quite substantial corporate structures).

Domino Records last year made news over their disputes with electronic producer Four Tet, over Domino receiving an unfair cut of revenue gained from streaming services. This goes to show that independent labels like Domino Records can still act questionably, with the label removing all of Four Tet’s records he had produced with them from streaming services amid the legal dispute.

Whilst we can acknowledge the morally dubious behaviour of major record labels and some independents, there are many independent record labels across the UK doing amazing work, uplifting new artists and talent in their area, and focusing on specific groups to promote, spreading their music to wider audiences. Let’s look at some examples of some exciting independent record labels in the UK currently and how they’re shaping the industry.

Speedy Wunderground

Speedy Wunderground is an independent record label established in 2013 by Dan Carey, Alexis Smith and Pierre Hall. The label is famous for its 7’’ singles of the UK underground scene. They have a unique approach to producing these singles, with the goal of turning them over as quickly and easily as possible. Everything is recorded in a day and then mastered the next day with no space for overthinking and ‘faff’ as they put it. Since 2013, Speedy Wunderground has become a record label people look to for an idea of new and exciting bands from the underground. The likes of Black Midi, Black Country, New Road and Squid all have singles with Speedy Wunderground. The label is unique in not just its rapid technique for recording and pushing out singles but for the fact it seeks to capture a screenshot of that day of recording, not dabbling with albums or EPs. Bands and artists aren’t signed to Speedy Wunderground in the same way as other labels, but the label does a lot to raise public awareness about bands. On top of that, a single with Speedy Wunderground means a single produced by renowned producer Dan Carey.

Elephant Arch Records

Elephant Arch Records was established in the lockdown of 2020 by Ben Ward and Alastair Flindall in Sheffield. They work to promote bands from in and around the region, and help the bands on their rosters put out music, organise tours and sell their records.

Ben told me that what’s important to Elephant Arch, alongside all the typical jobs that come with running a label, is being a fan to the artists on their roster. At the label they want to really ‘believe in the music or message’ the bands signed to them put out. They also don’t tie artists into excessive contracts, with no contracts they offer being longer than two years. The label aims to help bands ‘get their art to as many ears as possible to help further their careers,’ and views bands moving away to larger labels with more resources as a success rather than a betrayal. In this way, Elephant Arch Records act as a stepping stone for smaller artists in Yorkshire and beyond.

What differentiates Elephant Arch Records from others in the industry is their strong focus on community. As a label, they want to be able to support artists from Sheffield, Yorkshire and the rest of the north, acting as a platform to promote this talent. As Ben and Alastair point out, so much of the UK music scene is London-centric, so labels like Elephant Arch Records are valuable in working to diversify the scene, creating opportunities for artists where they are from or living. The label also is working to create a ‘music-centred community of independent businesses and artists’, striving to use business and individuals from or with links to the region to boost their local economy.

Alongside this, the label donates 10% of their profits to a local charity chosen by the artists. Meaning in that in under 2 years the label has already donated to grassroots venues in the area, the music venue trust, SARSVL (helping women affected by sexual abuse) and PAFRAS (helping refugees and asylum seekers in Leeds).

I found Ben’s perspective on streaming services interesting and is something I believe will become a more mainstream opinion in the industry in years to come. At the label, Ben told me they view streaming as an artist promotion and marketing tool rather than an income stream. Instead, the label focus on creating opportunities for their bands with local business and promoting the live music scene in Yorkshire.

BEAUTIFUL

BEAUTIFUL is a new label platform set up in 2021 by SHERELLE. The platform is specifically for black and LGBTQ+ artists, to help promote their work and cultivate new spaces in the communities.  BEAUTIFUL released their first compilation album in 2021, featuring a variety of black and queer electronic artists. In the future the platform aims to own clubs around the world, creating spaces for black and LBTQ+ artists to perform and be appreciated. The label platform addresses problems that have long affected the path to success for black and LGBTQ+ artists like generational wealth. It has been a lot easier to succeed in the music industry for white middle class artists, and the electronic music scene has become whitewashed despite genres like house and techno originating from black communities in America. SHERELLE’s work establishing this platform is crucial in giving support to these communities and hopefully will be a powerful force in the music industry moving forward.

These examples of UK-based independent record labels demonstrate their importance in the music industry. When labels have aims aside from just profitability, labels are a powerful force to help uplift minorities, regional scenes and experimental types of music. Ultimately, although the main function of record labels isn’t the manufacture and distribution of records anymore, their role as promotional organisations for artists and opening new opportunities for production, creativity or live performances is a crucial and necessary part of the industry. In the late 70s and early 80s, there was a rise in DIY record labels, collaboratively run and organised without corporate structures. Hopefully, we’ll see more like these going forward. I think the relevance of corporate record labels will decline if they don’t treat their artists more fairly, but independent labels could prevail, offering artists an equitable way into the industry.

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