Record label

In the music industry, a record label is a brand and a trademark associated with the marketing of sound recordings and music videos. A record label is also a company that manages such brands and trademarks; coordinates the production, manufacture, distribution, promotion, and enforcement of copyright protection of sound recordings and music videos; conducts A&R; and maintains contracts with recording artists and their managers. The term derives from and describes the round paper labels affixed to the center of gramophone records; such labels typically contain a trademarked logo and information about the sound recording and the companies involved in creating the product.

Terminology and business structure

When a label is strictly a trademark or brand, not a company, then it is sometimes called an imprint. An imprint is sometimes marketed as being a project or division of a label company, even though there is no legal business structure associated with the imprint. Sometimes an imprint is marketed as being a division of a label company's principal brand, rather than of the label company itself.

Record labels are often under the control of a corporate umbrella organization called a music group. A music group is typically owned by international conglomerate holding company, which often has non-music divisions as well. 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. Record companies (manufacturers, distributors, and labels) may also comprise a record group which is, in turn, controlled by a music group. The constituent companies in a music group or record group are sometimes marketed as being divisions of the group.

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. Some prefer to use the term indie label to refer to only those independent labels that adhere to an 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.

Music collectors often use the term sublabel to refer to either an imprint or a subordinate label company (such as those within a group). For example, in the 1980s and 1990s, "4th & B'way" was a trademarked brand owned by Island Records Ltd. in the UK and by a subordinate branch, Island Records, Inc., in the United States. The center label on a 4th & Broadway record marketed in the U.S. would typically bear a 4th & B'way logo and would state in the fine print, "4th & B'way™, an Island Records, Inc. company". Collectors discussing labels as brands would say that 4th & B'way is a sublabel or imprint of just "Island" or "Island Records". Similarly, collectors who choose to treat corporations and trademarks as equivalent might say 4th & B'way is an imprint and/or sublabel of both Island Records, Ltd. and that company's sublabel, Island Records, Inc.

Relationship with artists

A label typically enters into an exclusive contract with an artist to market the artist's recordings in return for royalties on the selling price of the recordings. Contracts may extend over short or long durations, and may or may not refer to specific recordings. Established, successful artists tend to be able to renegotiate their contracts to get terms more favorable to them, but Prince's much-publicized 1994–1996 feud with Warner Bros. provides a strong counterexample, as does Roger McGuinn's claim, made in July 2000 before a U.S. Senate committee, that The Byrds never received any of the royalties they had been promised for their biggest hits, "Mr. Tambourine Man" and "Turn, Turn, Turn".http://transcripts.cnn.com/TRANSCRIPTS/0007/11/se.01.html

A contract either provides for the artist to deliver completed recordings to the label, or for the label to undertake the recording with the artist. For artists without a recording history, the label is often involved in selecting producers, recording studios, additional musicians, and songs to be recorded, and may supervise the output of recording sessions. For established artists, a label is usually less involved in the recording process.http://www.secinfo.com/dsvr4.58n4.htm

Although both parties need each other to survive, the relationship between record labels and artists can be a difficult one. Many artists have had albums altered or censored in some way by the labels before they are released—songs being edited, artwork or titles being changed, etc. Record labels generally do this because they believe that the album will sell better if the changes are made. Often the record label's decisions are correct ones from a commercial perspective, but this typically frustrates the artist who feels that their artwork is being destroyed.

In the early days of the recording industry, record labels were absolutely necessary for the success of any artist. The first goal of any new artist or band was to get signed to a contract as soon as possible. In the 1940s, 1950s and 1960s, many artists were so desperate to sign a contract with a record company that they usually ended up signing a bad contract, sometimes giving away the rights to their music in the process. Entertainment lawyers are used by some to look over any contract before it is signed.

Industry consolidation

In the 1970s and 1980s, there was a phase of consolidation in the record industry that led to almost all major labels being owned by a very few multinational companies.

Resurgence of independent labels

In the 1990s, due to the widespread use of home studios, consumer CD recorders, and the Internet, independent labels began to become more commonplace. Independent labels are typically artist-owned (although not always), with a declared focus usually on making good music and not necessarily on the business aspects of the industry or making lots of money. Because of this, independent artists usually receive less radio play and sell fewer CDs than artists signed to major labels. Though at a fraction of the production cost of the "major" records they are able to recoup their initial advance at much lower sales numbers, sometimes as low as low thousands. They also tend to have more control over the music and packaging of the released product.

On occasion established artists, once their record contract has finished, move to an independent label. This often gives the combined advantage of name recognition and more control over one's music (not to mention a bigger slice of the royalty pie). Singers Dolly Parton, Aimee Mann and Prince, among others, have achieved this.

While there are many independent labels, folk singer Ani DiFranco's Righteous Babe Records is often cited as an ideal example. The singer turned down lucrative contracts from several top-name labels in order to establish her own New York-based company. Constant touring resulted in noteworthy success for an act without significant major funding. Ani and others from the company have spoken on several occasions about their business model in hopes of encouraging others.

Some independent labels become successful enough that major record companies negotiate contracts to either distribute music for the label or in some cases, purchase the label completely.

On the punk rock scene, the DIY ethic encourages bands to self-publish and self-distribute. This approach has been around since the early 1980s, in an attempt to stay true to the punk ideals of doing it yourself and not selling out to corporate profits and control. Such labels have a reputation for being fiercely uncompromising and especially unwilling to cooperate with the Big Four record labels at all. Perhaps the most important and influential labels of the Do-It-Yourself attitude was SST Records, created by the band Black Flag. No labels wanted to release their material, so they simply created their own label to release not only their own material but the material of many other influential underground bands all over the country.

Internet and digital 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 that is paid via Paypal or an online payment system. Some of these labels also offer hard copy CDs in addition to direct download. Most net labels acknowledge the Creative Commons licensing system thus reserving certain rights for the artist. Digital Labels are the latest version of a 'net' label. As where 'net' labels were started as a free site or just a hobby point, digital labels seek to give the major record industry a real run for their money. One of the pioneers of the major digital label was Fiberlineaudio

Open source labels

The new century brings the phenomenon of open-source or open-content record label. These are inspired by the free software and open source movements and the success of GNU/Linux.