FEATURE: Does it still needs record labels these days?

 Do we still need labels these days, especially in the guitar music sector? Even if you have a subjective personal answer immediately to hand, at second glance it is a question that is not quite so easy to answer. You can find out why in this feature.

History lesson

Just a quick history lesson, why do we talk about a label at all? Well, the major collecting societies, i.e. record companies, signed several artists of different styles and orientations at the time. In order to be able to catalog them better as well as manage them better economically, a record company was divided into several labels, which was then reflected in the different imprints on the vinyl records. Over the decades, the introduction of indie record companies, most of which specialized in just one genre of music, blurred the different terms, so that today the term label is more or less synonymous with the term record company.

What is the job of a label?

In principle, the record company does the work that the artist did not want to do or was unable to do due to a lack of training. At the beginning of the exploitation of music up until the early 1980s, the artist was given an artist contract, which guaranteed him a share of sales of up to approx. 10% of the HAP (retail price) of every sound carrier sold. All costs incurred, such as recording studio rental, pressing of the recordings, studio musicians, meals and accommodation for the musicians during the recording sessions, promotion, marketing etc. were covered by the record company, which in return secured at least 90% of the revenue. The major record companies usually had their own recording studios, which were in constant use for the artists' recordings with permanently employed technicians.

This all changed with the introduction of the recording contract. For the first time, the artist, or rather the management, was involved in the administration, as there was a fixed advance payment from the record company for which the artist had to deliver one or more albums. You were free to choose the studio and, depending on the rate you negotiated with the studio owner, you could use part of the advance for private purposes as long as the end result was to the liking of the record company executives. The advance can be offset, i.e. you do not receive any royalties until the advance has been recouped through sales. As this is at the artist's expense, the artist receives a higher share of the profits AFTER the advance has been repaid, on average up to approx. 20% of the HAP.

However, the two business models mentioned above have now largely become obsolete with the introduction of home recording and streaming services. Although streaming services are known to pay out pitifully low margins to labels, almost 50% of sales are still generated by streaming services, which suggests that well over 90% of the world's population consumes music almost exclusively via streaming services. Only a few vinyl and CD lovers are keeping up with their purchases, which has meant that only international superstars can generate correspondingly large revenues. The situation is comparable to the price of concert tickets. If Metallica ask €200 for a ticket, the stadium is sold out after a few hours, if the local hero band wants €20, everyone complains about the high ticket prices.

The logistical effects of the technical revolution

Of course, the technical possibilities that a DAW has offered for years are simply fantastic and enable recordings to be made that produce good results for very little money. I don't want to open the barrel of sound quality analog vs. digital, original vs. simulation, because one thing you should always keep in mind is that the economic results don't give a damn how a sound was produced. In contrast to the past, high-end productions today no longer ensure any economic advantages, as the mastering process, at the latest, means that even the most technical garbage pulled down to 0 dB only reveals to real experts whether, for example, a Chris Lord Alge sat at the controls or whether Greti and Kleti switched plug-in presets on and off.

Which puts us in the middle of the label discussion, because today a label only has 3 functions: to provide a secure distribution, to offer a professional marketing department and to guarantee a reputation to the outside world. Even if the major companies still achieve gigantic sales with their back catalog alone, most labels only pay a small advance, and in the majority of cases no advance at all, especially for newcomers.

Conversely, this means that the artist either sticks everything together himself in his home studio, or he takes money in his hand and pays a rental studio to record his music. Either way, the artist must first make a financial advance payment before he can get one or more songs out to the public. At this point at the latest, the first readers will ask themselves why a label is needed at all, which incidentally would also like to have a percentage of the live fees in the so-called 360 degree deals. What does the label get in return?

The services of a label

To put it in a nutshell, if you want to pursue your music as a hobby, have a good time and make your music available to your friends, family and a manageable number of fans, you definitely don't need a label. Many service providers offer the listing of personal recordings in all major streaming services worldwide for a monthly/annual or sometimes one-off fee. A certain level of quality must be maintained, but anyone who fails here should consider whether their music is really worth publishing. Otherwise, CDs and vinyl can be produced in very small quantities and then sold via your personal online store or marketplace, etc., and that's it. Income 100% minus the commissions of the respective intermediaries. Everything, really everything, that is needed to promote your personal output is up to you, which usually means that the radius of your personal brand awareness does not expand.

This is where an established label can really score points, provided it is really interested in you and your achievements. An established label usually has an established marketing structure consisting of permanent employees and freelancers, who in turn maintain contact with the trade press, etc. Once in the label's roster, you have access to a well-stocked database with the relevant contacts, so that your personal work at least gets to more or less interested writers, sometimes even journalists.

However, this does not mean that corresponding articles or interviews will be printed with you, as this largely depends on the placement of corresponding advertisements. All magazines always emphasize that they are not for sale, but every expert knows that the pure sale of magazines only covers a negligible part of the production and personnel costs, so that advertising is the decisive point in product planning. Only Tesla can afford not to advertise its products.

As a result, we have reached a point of complete perversion in the exploitation of music. I know some artists who not only pay for the entire production of their album themselves, do not receive any advance payment from the label and also pay for the entire marketing such as advertising etc. themselves, they also pay the label for the use of their infrastructure. In "normal" life, all musicians have a regular job with which they earn enough money to be able to afford to "play rock star" as a hobby. Imagine this situation in a normal trade, a bricklayer who buys all the tools himself and pays the builder to build a wall for him for free. I would be very curious to see the reaction of the trade unions and other bricklayers.

How should the artist behave?

As I said, it is not easy to give final guidance. Personally, I would simply make a calculation. Working without a label or setting up your own label means total artistic freedom, but it also means taking on all the financial costs and a lot of cold calling, which sometimes pushes you to your human limits. Because you should always be aware of one thing: nobody, absolutely NOBODY has been waiting for you and your music, no matter how good, unusual and entertaining you are.

However, if you are convinced of the quality of your music and are able and willing to provide a mid five-figure sum per planned album for record production, GEMA, marketing, promotion, tour support, recording studio rental, travel expenses, photographer, video artist, social media manager and much more, you can also work without a label. What's more, you can't do this work in the evening after a regular 9 to 5 job on the side. Ultimately, this can only be guaranteed if you are either a private individual or have financial leeway over a longer period of time thanks to an inheritance that keeps your back free.

The nice thing is, however, that if you have held out for several years and have been able to establish your music to such an extent that you have been noticed by the respective scene, the labels will approach you all by themselves and offer their support, usually at much better conditions than was the case at the beginning of your career. Again, always remember that this behavior is completely normal and legitimate, record companies are commercial enterprises, not cultural promotion programs! It's like any other job, it's nothing personal, it's just about money. If you always keep this wisdom in mind, everything doesn't hurt so much.

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The Evolution of Record Labels: A Comprehensive Journey through their Origin and Development

Introduction:

The music industry has undergone a remarkable transformation over the years, with record labels playing a pivotal role in shaping the landscape. The evolution of record labels can be traced back to the late 19th century, and their journey has been marked by technological advancements, cultural shifts, and business innovations. In this article, we will explore the rich history of record labels, from their humble beginnings to their current status as key players in the global music ecosystem.

The Birth of the Phonograph and the Emergence of Record Labels:

The story begins in the late 19th century when Thomas Edison invented the phonograph in 1877. This groundbreaking invention allowed for the mechanical reproduction of sound, paving the way for the mass production and distribution of music. However, it wasn't until the early 20th century that record labels, as we know them today, started to take shape.

In the early 1900s, independent entrepreneurs recognized the commercial potential of recorded music and began to establish small companies to manufacture and distribute records. These early record labels were often localized and focused on specific genres or regional artists. They played a crucial role in popularizing the concept of recorded music, as they produced and distributed
physical records made of shellac.

The Jazz Age and the Rise of Major Labels:

The 1920s witnessed the Jazz Age, a period that saw the rapid growth of the music industry and the establishment of major record labels. Companies like RCA Victor, Columbia Records, and Decca Records emerged as dominant players, creating a framework for the modern record label. These major labels exerted significant control over recording, manufacturing, and distribution processes, allowing them to shape the musical landscape by promoting certain genres and artists.

The Golden Era of Vinyl and the Influence of Technology:

The mid-20th century marked the golden era of vinyl records, with 33⅓ RPM LPs and 45 RPM singles becoming the standard formats. This period saw the consolidation of major labels' power and the emergence of iconic figures like Berry Gordy Jr., who founded Motown Records in 1959. Technological advancements, such as stereo recording and the advent of magnetic tape, further transformed the recording process, enhancing the quality of music production.

The Counterculture Movement and Independent Labels:

The 1960s and 1970s witnessed a cultural revolution, with the counterculture movement challenging the mainstream. Independent labels gained prominence during this period as they provided a platform for alternative and experimental music. Labels like Stax Records and Sun Records played crucial roles in promoting genres like soul and rock 'n' roll, while also fostering the careers of legendary artists like Elvis Presley and Otis Redding.

The Digital Revolution and the Challenges for Record Labels:

The late 20th century brought about the digital revolution, profoundly impacting the music industry. The introduction of CDs in the 1980s and digital formats in the 1990s transformed how music was consumed. This shift posed challenges for traditional record labels as online piracy and file-sharing became prevalent. To adapt, labels had to explore new business models and embrace digital distribution platforms.

The 21st Century: Streaming Dominance and Label Diversification:

The 21st century has been marked by the dominance of streaming services. Companies like Spotify, Apple Music, and Deezer have revolutionized how people access and consume music. Record labels have had to adapt once again, negotiating complex licensing agreements with streaming platforms to ensure fair compensation for artists. Moreover, some artists have chosen to bypass traditional labels, utilizing independent distribution channels made possible by the internet.

Conclusion:

The evolution of record labels is a fascinating journey that mirrors the dynamic changes in technology, culture, and business practices. From the early days of shellac records to the streaming-dominated landscape of today, record labels have navigated through various challenges and transformations. Despite the shifting landscape, these entities continue to play a vital role in shaping the music industry, discovering talent, and bringing music to audiences worldwide. As we move forward, the role of record labels will undoubtedly continue to evolve, adapting to new technologies and cultural shifts while remaining at the forefront of the ever-changing music ecosystem.