Over the past 20-30 years, record labels have transformed the way they operate. This comes with advancements in technology, changes in listener behavior, and shifts in the music industry as a whole. Here are some of the main ways labels have changed…

In the late 1990s and early 2000s, the industry started shifting from physical formats (CDs, vinyl) to digital downloads, and then eventually to streaming.

The rise of streaming platforms like Spotify, Apple Music, and Tidal has fundamentally changed how people listen to music. These platforms offer pretty much any song you could ever want for a relatively small monthly fee.

Labels could no longer rely on CD sales and had to focus on optimizing streaming revenue. Physical album sales have significantly declined, making up a smaller portion of total revenue. Streaming has become the dominant source of income for record labels, even though the payout per stream is much lower than traditional album sales.

Because of this, labels have focused more on diversifying their revenue streams. Many labels have started offering 360 deals, where they take a share of an artist’s earnings (sometimes for a set amount of time) in exchange for financial and promotional help. This is different from the traditional method of owning the masters of the artist’s songs.

On top of that, labels are more often offering shorter and more flexible contracts to artists. Labels are more cautious, often signing artists for fewer albums or even single releases to mitigate risk.

This is all in the wake of more artists choosing to go or stay independent. Because of social media and fan subscription models, many artists have been able to earn more money as an indie than they would on a label because they keep all or most of the earnings.

Because artists don’t need labels like they used to, this has led to major labels rethinking what their role and function is for the artist. They used to be the gatekeepers. They used to decide who would even get heard or not.

But nowadays, labels are no longer the gatekeepers. So what’s the point of a label?

In the past, Artist and Repertoire (A&R) departments were invested in their artists. They’re typically responsible for scouting and developing talent. Now, they rely heavily on data and analytics from streaming services and social media to identify potential hits.

Labels have adapted to new marketing techniques, focusing heavily on digital marketing, social media campaigns, and influencer partnerships.

There’s also a greater focus on creating a wide range of content, like short-form content for social media. Labels also invest in owning the intellectual property of these contents.

To be clear, you don’t need a label to succeed. So if you don’t want to sign, you shouldn’t feel the pressure to.

But if singing a label deal interests you, here are some things that a label would usually offer today:

• Advances: Labels give upfront financial advances to artists, which can be used to cover recording costs, living expenses, and other career-related investments.
• Publicity: They coordinate with publicists to secure media coverage, including interviews, reviews, and features in media outlets.
• Advertising: This would involve paying for ads, like on social media, influencer partnerships, and radio.
• Connections: Labels can connect you with other artists/songwriters on the label to feature or write with.
• Market Insights: Labels use data analytics to provide artists with insights into their audience demographics, streaming statistics, and market trends.
• Performance Metrics: They track the performance of releases and marketing campaigns to figure out how to improve their methods.
• Rights Management: Depending on the deal, they may manage the rights to an artist’s music, ensuring proper use and protection against infringement.
• Publishing Deals: Labels often manage the publishing rights to an artist’s music, handling the registration of songs, and the collection and distribution of royalties.
• Sync Licensing: They work to secure placements for an artist’s music in films, TV shows, commercials, and video games.
• Physical Distribution: Despite the decline in physical sales, labels still handle the production and distribution of physical formats like vinyl and CDs.
• Digital Distribution: Labels ensure that music is available on all major streaming platforms (Spotify, Apple Music, Amazon Music, etc.) and digital stores (iTunes, Google Play).

There are plenty of benefits of staying an independent musician and not signing a record label deal. These benefits revolve around creative control and financial earnings.

Indie artists have complete control over their music, including the sound, style, lyrics, and overall creative direction. There’s no pressure to conform to a label’s commercial expectations.

They can also release music on their own timeline without having to stick to a label’s (usually delayed) schedule or release dates.

Without a label taking a significant cut, you can keep a larger percentage of your earnings as an indie artist, if not all of the earnings. You also would own all your recordings and control the rights as well.

By owning your music and maintaining control over your career, you would have the potential to build significant long-term financial equity. You can earn a larger share (or all) of royalties and other income streams over time, leading to potentially higher lifetime earnings.

Record labels often have a specific timeline for releasing a single or an album and they may have certain strategic ideas that may not line up with the artist’s. Also, they manage multiple artists and may not want to release albums to close together.

But as an indie artist, you can release music whenever you want. You can also quickly change plans if you need to and not have to answer to anyone else. You even have control over what deals you sign, whether with a label or publisher or whomever. For example, you could sign a small, one-off deal for one of your songs as a test.

Along with this, you also have more room to experiment, not just musically but also with your marketing and distribution.

Let’s say you’ve looked at the benefits of both signing a record label deal and staying independent and you’ve decided you want to partner with a label.

This is not legal advice – you should review any record label deal with a music lawyer. But here are some factors to consider before you sign…

Make sure you know who will own the master recordings. Ideally, you should aim to keep ownership or at least negotiate a reversion clause where ownership returns to you after a certain period.

This is the same with the publishing (songwriter) rights. Pretty much 100% of the time, a label should not be trying to take ownership of your songs. They can handle the publishing – registration, collection, and paying out royalties – but make sure you keep your songwriter rights. Consider asking for a reversion clause on the publishing side too.

Clarify the handling of your songwriting and publishing rights. Retaining your publishing rights is beneficial, but if you must give them up, ensure the terms are favorable.

Know what an advance is – basically, a loan you have to repay the label through your earnings. Know what the recoupment process is – through what revenue streams the label wants to get the advance back.

You’ll want to see the royalty percentage you’ll receive from sales and streams. A fair rate for new artists typically ranges between 15-20% of net sales. Along with this, make note of what expenses (marketing, recording, touring) will be deducted from your royalties and make sure they’re reasonable and transparent.

What does this label deal do for you? How will it help your career move forward? Make sure the exchange is fair.

They should be helping you with marketing, promotion, tour support, financial support for making new music, and connecting you with other artists and songwriters on the label.

Look at the length of the contract and the number of albums or singles you’re required to deliver. A shorter term with fewer commitments gives you more flexibility.

Be wary of long option periods where the label can extend the contract without significant additional benefits to you.

Make sure the label will give you regular, transparent accounting and royalty statements. Also, something many artists don’t think about: make sure you have the right to audit the label’s records to ensure you’re being paid accurately.

Understand under what conditions either party can terminate the contract. Favorable clauses will let you exit the deal if certain benchmarks (e.g., minimum sales or promotional efforts) are not met.

Again, you should always get legal advice before you sign anything. Find a reputable entertainment lawyer to review the contract. They can spot red flags and negotiate better terms on your behalf.

Record labels are mainly only interested when they see some success already. The big labels are no longer as interested in developing unknown artists as they used to be. They want to know an artist can make money before they partner with them. Then, ideally, they can help that artist elevate their career to the next level.

So your success as a career artist shouldn’t hinge on getting a record label deal. You should build your career assuming you’ll never get a record deal. Then, when labels do show interest, you have more negotiating power and can decide if the label offer will help your career.

With the rise of short-form content on social media, virality has become a much more common thing, and record labels look for it. When an artist goes viral for their music, that means they then have a huge fanbase that will stream their music, buy their merch, go to their shows, and companies that may want to offer brand or sponsorship deals. And that’s appealing to labels. If you’re already making money from your music, a label will want in. And in exchange, they will promise to elevate your career to the next level.

Although streaming payouts are very low (and arguably unfair), you can still make decent money from streaming. If you get enough exposure to your music, all of the streams add up to a chunk of money, sometimes enough that you can live off that income alone. And if you get to that level, you will probably have record labels contacting you. They see financial success and they want to be a part of it.

If you have a large social media following, it’s more likely a record label will be interested. Where the eyes are, the money follows – and labels are all about making money. And a big fanbase means you probably have good streaming stats, you’re more likely to sell out shows, and you could make money from sponsorship and brand deals.

There’s nothing like seeing a great show. It can be electric. And sometimes, a band or artist has undeniable talent, and record labels like to see that. To the label, an artist who puts on a great show is valuable because that means tickets will sell. And, again, where there’s money, the labels will flock. So even if you don’t have the biggest fanbase or the best streaming numbers, you can put on an undeniably entertaining show and get signed to a label as primarily a touring artist.

An Electronic Press Kit (EPK) is a page on your website that has all the information a record label would want to see. It’s your chance to sell the label on the idea of you. It makes it easier for them to know what you bring to the table, and it also shows the label you’re a professional who’s serious about your career.

Here’s what your EPK should include:

• Your artist bio
• Professional promo photos
• Your music (streamable and downloadable)
• Music videos and performance videos
• Press quotes
• Career highlights, achievements, and awards
• Social media links
• Streaming links
• Contact information and/or a contact form

The best way to find a record label to partner with is to see what labels similar artists are signed to. Find your favorite small- to mid-sized artists, see what label they’re signed to, and then submit your music to that label.

To get you started, here are some record labels that are currently looking for artists:

• Atlantic via Emerge (pop, R&B)
• Babygrande (hip-hop, indie, EDM)
• Captured Tracks (indie, post-punk)
• Century Media (hardcore, metal, hard rock)
• Dim Mak (electronic, punk, indie, hip-hop)
• Domino (indie)
• Epitaph (punk, emo)
• Glassnote (indie, hip-hop)
• Mute Records (indie, post-punk, electronic)
• Nuclear Blast (metal)
• Red Bull (alternative, hip-hop)
• Revolver (all genres)
• Stones Throw (hip-hop, soul, electronic)
• Sub Pop (indie)
• Universal Music Group via Spinnup (all genres)