What is the purpose of labels in the music industry and why do they hold so much power as well making more money than the artists signed?
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Labels do all the legwork to get music out to consumers:
* They scout new talent.
* They link promising musicians up with songwriters and producers.
* They provide cash advances so new artists can afford to book studio time.
* They negotiate distribution deals to get music on the radio and into (real/digital) stores.
Labels are essentially the bridge between you playing local clubs and having a cool mixtape and you becoming a nationally known artist.
Same as publishers for books. They put the content in front of people. They make deals radio stations, movies, games, etc. To sell music. They also pay for production of songs, music videos, CD, etc. Sometimes they pay for touring. In exchange, artists sign (often predatory) contracts. As such, they’re always going to make more money. Modern day, most bands only really see money from touring, making cents on the dollar per song sold on something like itunes. You may remember a few years ago people tried to raise money to buy Ke$ha out of her contract. She was sexually assaulted by her record producer, but Sony wouldn’t let her out of her contract.
Tl;Dr they control the purse strings and legally bind people and bands
It’s the same as having a product idea. Its useless if you dont own the factory or have money to develop your idea. So you need to team up with a manufacturer which has the production means and the distribution network. And since hes doing most of the work he gets more money
The age-old saying “You have to spend money to make money” applies here, and the labels are the ones spending all the money to record, advertise, and distribute the music, so they get a larger chunk of the profits. The artists most likely don’t have enough money to get all that done themselves, so they have to make a deal with a label giving away a bunch of power over their music in order for the chance at making it big. Once they do make it big and have their own money, they are usually still bound by the legal agreements and deals they made with the label before they became famous.
Labels are the venture capitalists / angel investors of the music business. Becoming famous isn’t really about talent, it’s about investment.
Labels are like banks, they basically loan money to bands. Usually the band doesn’t make a penny until the label has made their initial investment back.
A predatory industry of talentless people with business sense taking advantage of talented people with no business sense
becoming a professional celebrity musician requires a metric fuckton of startup money.
there’s also a nightmare of logistics, networking, wheel greasing, etc.
sure, you can put your mixtape on soundcloud for 100 people to criticize. or you could sign with Island Records and immediately sell a million copies just by brand recognition.
and if the producer really likes you he’s gonna tell Ariana Grande to do a cameo on your first album. bam, now you’ve done an album with a real musician. sure behind the scenes she literally just showed up for one saturday and phoned it in, and you never even spoke to her, but no1 else has to know that!
They lose money on many of the artists that they sign. And the rare artist that becomes wildly successful usually breaks away from their old label to make more money. Without their willingness to take risks in a highly volatile market, you may never have heard some of the musicians and singers that you love.
In the olde days artists relied on radio and albums to become known, albums in particular (vinyl or CD) are expensive to start mass production. A label would really the risk that the artist would take off by paying for this start up cost, which should easily be in the tens of thousands of dollars.
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