Product Code Database
"Big Three" music labels
A record label or record company is a brand or trademark of music recordings and , or the company that owns it. Sometimes, a record label is also a Music publisher company that manages such brands and trademarks, coordinates the production, manufacturing, distribution, marketing, promotion, and enforcement of copyright for sound recordings and music videos, while also conducting talent scouting and development of new artists, artist financing and maintaining contracts with recording artists and their managers. The term "record label" derives from the circular label in the center of a vinyl record which prominently displays the manufacturer's name, along with other information.
Within the mainstream music industry, recording artists have traditionally been reliant upon record labels to broaden their consumer base, market their albums, and promote their singles on streaming services, radio, and television. Record labels also provide , who assist performers in gaining positive media coverage, and arrange for their merchandise to be available via stores and other media outlets.
| Universal Music Group () | Hilversum, North Holland, Netherlands (corporate) Santa Monica, California, United States (operational) | List of Universal Music Group labels | 31.9% | |
| Sony Music Entertainment | New York City, New York, United States | List of Sony Music labels | 22.1% | |
| Warner Music Group () | New York City, New York, United States | List of Warner Music Group labels | 16% |
From 1929 to 1998, there were six major record labels, known as the Big Six:
PolyGram was merged into Universal Music Group (UMG) in 1999, leaving the remaining record labels to be known as the Big Five.
In 2004, Sony and BMG agreed to a joint venture and merged their recorded music division to create the Sony BMG label (which would be renamed Sony Music Entertainment after a 2008 merger); BMG kept its music publishing division separate from Sony BMG and later sold BMG Music Publishing to UMG. In 2007, the remaining record labels—then known as the Big Four—controlled about 70% of the world music market, and about 80% of the United States music market.
In 2012, the major divisions of EMI were sold off separately by owner Citigroup: most of EMI's recorded music division was absorbed into UMG; EMI Music Publishing was absorbed into Sony/ATV Music Publishing; finally, EMI's Parlophone and Virgin Classics labels were absorbed into Warner Music Group (WMG) in July 2013.Joshua R. Wueller, Mergers of Majors: Applying the Failing Firm Doctrine in the Recorded Music Industry, 7 Brook. J. Corp. Fin. & Com. L. 589, 601–04 (2013). This left the so-called Big Three labels.
In 2020 and 2021, both WMG and UMG had their IPO with WMG starting trading at Nasdaq and UMG starting trading at Euronext Amsterdam and leaving only Sony Music as wholly-owned subsidiary of an international conglomerate (Sony Entertainment which in turn is owned by Sony).
Independent labels are often considered more artist-friendly. Though they may have less sales power, indie labels typically offer larger artist royalty with a 50% profit-share agreement, aka 50–50 deal, not uncommon. In addition, independent labels are often artist-owned (although not always), with a stated intent often being to control the quality of the artist's output. Independent labels usually do not enjoy the resources available to the "big three" and as such will often lag behind them in market shares. However, frequently independent artists manage a return by recording for a much smaller production cost of a typical big label release. Sometimes they are able to recoup their initial advance even with much lower sales numbers.
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 along with a larger portion of royalty profits. Artists such as Dolly Parton, Aimee Mann, Prince, Public Enemy, among others, have done this. Historically, companies started in this manner have been re-absorbed into the major labels (two examples are American singer Frank Sinatra's Reprise Records, which has been owned by Warner Music Group for some time now, and musician Herb Alpert's A&M Records, now owned by Universal Music Group). Similarly, Madonna's Maverick Records (started by Madonna with her manager and another partner) was to come under control of Warner Music when Madonna herself of controlling shares in the company.
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, to the point where it functions as an imprint or sublabel.
A record label may give a musical act an imprint as part of their branding, while other imprints serve to house other activities, such as side ventures of that label.
However, not all labels dedicated to particular artists are completely superficial in origin. Many artists, early in their careers, create their own labels which are later bought out by a bigger company. If this is the case it can sometimes give the artist greater freedom than if they were signed directly to the big label. There are many examples of this kind of label, such as Nothing Records, owned by Trent Reznor of Nine Inch Nails; and Morning Records, owned by the Cooper Temple Clause, who were releasing EPs for years before the company was bought by RCA.
A label typically enters into an exclusive recording contract with an artist to market the artist's recordings in return for Music 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. Records provides a strong counterexample, as does Roger McGuinn's claim, made in July 2000 before a US 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!".
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, , 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.
The relationship between record labels and artists can be a difficult one. Many artists have had conflicts with their labels over the type of sound or songs they want to make, which can result in the artist's artwork or titles being changed before release. Other artists have had their music prevented from release, or shelved. Record labels generally do this because they believe that the album will sell better if the artist complies with the label's desired requests or changes. At times, the record label's decisions are prudent ones from a commercial perspective, but these decisions may frustrate artists who feel that their art is being diminished or misrepresented by such actions.
In other instances, record labels have shelved artists' albums with no intention of any promotion for the artist in question. Reasons for shelving can include the label deciding to focus its resources on other artists on its roster, or the label undergoing a restructure where the person that signed the artist and supports the artist's vision is no longer present to advocate for the artist. In extreme cases, record labels can prevent the release of an artist's music for years, while also declining to release the artist from their contract, leaving the artist in a state of limbo. Artists who have had disputes with their labels over ownership and control of their music have included Taylor Swift, Tinashe, Megan Thee Stallion, Kelly Clarkson, Thirty Seconds to Mars, Retrieved 3 September 2021. Clipse, Ciara, JoJo, Michelle Branch, Kesha, Kanye West, Lupe Fiasco, Paul McCartney, and Johnny Cash.
In the early days of the recording industry, recording 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 sometimes ended up signing agreements in which they sold the rights to their recordings to the record label forever. Entertainment lawyers are usually employed by artists to discuss contract terms.
Due to advancing technology such as the Internet, the role of labels is rapidly changing, as artists are able to freely distribute their own material through Internet radio, peer-to-peer file sharing such as BitTorrent, and other services, at little to no cost, but with correspondingly low financial returns. Established artists, such as Nine Inch Nails, whose career was developed with major label backing, announced an end to their major label contracts, citing that the uncooperative nature of the recording industry with these new trends is hurting musicians, fans and the industry as a whole. However, Nine Inch Nails later returned to working with a major label, admitting that they needed the international marketing and promotional reach that a major label can provide. Radiohead also cited similar motives with the end of their contract with EMI when their album In Rainbows was released as a "pay what you want" sales model as an online download, but they also returned to a label for a conventional release. Research shows that record labels still control most access to distribution.
A look at an actual 360 deal offered by Atlantic Records to an artist shows a variation of the structure. Atlantic's document offers a conventional cash advance to sign the artist, who would receive a royalty for sales after expenses were recouped. With the release of the artist's first album, however, the label has an option to pay an additional $200,000 in exchange for 30 percent of the net income from all touring, merchandise, endorsements, and fan-club fees. Atlantic would also have the right to approve the act's tour schedule, and the salaries of certain tour and merchandise sales employees hired by the artist. In addition, the label also offers the artist a 30 percent cut of the label's album profits—if any—which represents an improvement from the typical industry royalty of 15 percent.
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