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Gold music record hanging on a wall in a golden frame Gold music record hanging on a wall in a golden frame

What is a record label?

4 min read

Learn what role record labels play in the music industry ecosystem.

Record labels are companies that represent recording artists and monetize sound recordings.

A invests in, manufactures, distributes, promotes, and on behalf of the .

This includes:

  • Investing in the development of the artist and their music

  • Organizing and supporting the recording process

  • Manufacturing and distributing both physical and digital formats to physical retailers and

  • new sound recordings with

  • sound recordings for a wide range of uses, including digital streaming, download sales, and in films, TV shows, games, and commercials

  • Promoting and marketing artists and their sound recordings

  • Developing further revenue opportunities for artists and their music, for example, brand partnerships

What does a record label do?

Record labels offer artists , also known as deals, which are exclusive agreements between the label and the artists.

Typically, on signing a recording contract, a record label will provide financial support in the form of an which is on future earnings such as .

Record labels support the artist during the recording process. An representative will help the artist and other needed to record the album, recommend and appoint and other collaborators, arrange time in recording studios, and give feedback on the recordings.

In most cases, record labels also pay for and deliver all the marketing, promotion, and for the recordings as . Launching campaigns for the release of new music can be expensive and require a significant amount of time, resources, and expertise. Having a record label's team of experienced specialists on hand can be highly beneficial to a creator.

Record labels are usually entitled to the and income share. They may also administer rights and royalties of the artists and other they represent and pay them according to the recording contract. They also have a role in ensuring that the they record are licensed from their songwriters and for the needed for and digital distribution.

Record labels develop further revenue and promotional opportunities for artists and their music. For example, they have brand partnership teams that will look for ways for an artist to collaborate with a brand of products or services that can help promote the music.

They also have a department or team, called a sync team, tasked with licensing sound recordings for use in films, TV shows, and commercials, which drive additional income streams.

For more details about this, visit our topics on Music Creators’ Rights, Rights Transfer and Licensing, and Scope of Protection.

What’s the difference between major & independent record labels? 

The main differences between a major and an independent record label are the company's size, resources, and .

Major Record Labels

As of writing, there are three major record companies, often referred to as the majors:

  • Universal Music Group

  • Sony Music Entertainment

  • Warner Music Group

The majors are large organizations that operate in over 70 countries, with global workforces that number in the thousands.

They have a number of record labels that operate under the umbrella of their parent groups. For example, Island, Def Jam, and EMI are under Universal Music Group; Columbia Records, RCA Records, and Epic Records are part of Sony Music Entertainment; and Atlantic, Parlophone, and Warner Records are part of Warner Music Group.

The parent groups also have music publishing arms, with the recording and publishing arms both under the same corporate umbrella but operating independently and separately.

A singer-songwriter can be to different companies for representations of their rights, for example, Publisher A for the publishing of musical works and Record Label B for the creation and distribution of sound recordings.

Independent Record Labels (Indies) 

Record labels that operate without the financial backing of any of the other three major labels are considered independent record labels, commonly known as indies. They can range in size and often work with smaller distribution and publishing companies.

They typically work with other companies for their distribution and promotion of their sound recordings and artists. This can include partnerships with the major labels.

An independent record label operates on a more local or regional scale, but can also reach worldwide audiences, and sometimes specializes in niche genres or markets.

Independent record labels operate in most countries, and below are some examples from around the world:

  • Because - France

  • BMG – Global

  • Essence Music - Brazil

  • Honey Soundsystem – India

  • Maltine Records - Japan

  • Mavin Records - Africa

  • Mushroom Records – Australia

  • Nairobi Records - Kenya

  • PIAS - Global

  • Rimas - Latin America

  • Spoonfed Record – Sweden

  • Sub Pop - US

Click here to contact us and request to add your company to this list.

Image credit: Jakob Johansson, Parapix