Record Labels in the Digital Era

The music world has gone through a huge transformation over the past few decades and Record Labels have been at the front and centre witnessing every shift. From the decline of physical albums to the rise of streaming services, from “chart-toppers” to “viral hits,” and from legendary rockstars to DIY indie artists pushing musical boundaries—record labels have seen it all! However, in the digital age, the future of record labels is a topic of constant debate! So, join in and take a look at how the future might look for a musician like you!

We’ll be taking a look at the following:

1. What Do Record Labels Do?
   
   
2. What are Indie Labels?
   
   
3. Do Artists Need Record Labels?
   
   
4. How Do Record Labels Work In The Digital Age?
   
   
5. What are the Effects of Social Media on Record Labels?
   
   
6. How Does A. I Affect The Record Labels?
   
   
7. What Are The Problems With Record Labels?
   
   
8. Final Thoughts
   

What Do Record Labels Do?

Record Labels are usually the first thing that pops into someone’s mind when the music industry is in question. Universal, Sony and Warner are the Major 3 Labels, but their business model is much more than being a recording company! 

The record industry has been at the forefront of technological transformation than any other part of the music business. The process of getting the record from the studio to the listener was a lengthy and expensive one. With the advent of technological advancements, albums, EPs and Singles can easily be recorded, produced and distributed through a laptop! 

Earlier, recording, printing, distributing, and marketing albums didn’t come cheap—it was a pricey business, far beyond what most unknown artists could afford. Record labels used to spot talent, promote them and invest the funds to cover all those costs. They had the connections to get records on shelves and songs on the radio. Of course, this all came at a price—a big chunk of the profits in return!

Nowadays, fans can directly access music from a variety of digital service providers like Spotify, Apple Music and Amazon Music. So, does that make the record labels useless? Well, not completely. The technology and accessibility certainly give the artist more control over their music, release schedules and distribution, however, it also becomes a major burden to deal with the promotion, marketing, merchandising and touring or the business part of the equation. 

So, the record labels can still be helpful for the artists in promoting and distributing their music, negotiating deals with streaming services and platforms, securing licensing opportunities, and managing royalties. So, while you’re busy creating your next chart-topping hit, they’re making sure it gets the audience it deserves. For example, the album “Good Girl Gone Bad” by Rihanna is known for transforming her image as an artist. That was due to her label’s intervention and decision-making.

What are Indie Labels?

Indie Labels- where creativity meets a little more freedom! During the late 1990s and early 2000s, the major labels saw an increasing backlash from the artists who were signed to them due to one-sided contracts and little to no creative freedom. That is also the time when the Indie (Independent) Labels began growing in popularity. What was truly special about these labels was that a lot of them started by promoting a genre or a group of people rather than promoting trends. They created small but fertile niches and introduced the audiences to sounds and genres that were not exactly mainstream like Britpop and Grunge. 

Artists signed to indie labels often enjoy the creative freedom to experiment with their sound and style without the pressure of conforming to commercial trends. This means they can take risks, try out new genres, and stay true to their artistic vision. But here's the trade-off: while indie labels offer more room for creativity, they usually lack the massive promotional machine that major labels bring to the table. You get to call the shots creatively, but you might not get the same level of exposure or global reach.

Indie labels, in fact, have often been ahead of the curve, predicting what would eventually hit the big time. And guess what? That still holds true today! Instead of trying to please everyone, indie labels focus on smaller, loyal fanbases—delivering the sounds that mainstream sometimes misses. For example: Artists like Billie Eilish, who started off with her brother on a small indie label, making music that didn't quite fit the traditional pop mould. Billie’s case tells us how Indie labels are great launchpads to popularity too!

Do Artists Need Record Labels?

Well, yes and no. Do artists need record labels in a world where you can upload a song to Spotify in minutes? Going solo is an option that many even choose but it does not compare to the network, resources and experience that the labels can provide especially if you’re doing everything yourself. As the music industry dives deeper into the digital age, record labels are hustling to keep up and stay in the game. In this fast-paced, ever-evolving landscape, the future of record labels is being shaped by two major forces: the rise of digital streaming and the ongoing debate between indie artists and those signed with labels.

Even with the rise of independent artists, record labels still bring some serious perks to the table. Sure, going indie gives artists full creative control and a bigger slice of the earnings pie, but the downside? They often miss out on the resources and connections that labels offer. Record Labels are great launchpads for artists, providing the cash, marketing muscle, and industry network to get them to the next level. Whether it’s getting radio airplay or organizing world tours, labels have the infrastructure and know-how to help artists reach new heights.

However, choosing between independence and signing with a label really comes down to an artist’s goals, resources, and the kind of support they need. Some artists thrive on the freedom of being independent, while others appreciate the guidance and backing a label provides. For example: ‘Golden Hour’ singer-songwriter JVKE decided not to sign with any label even after his track became a viral hit on TikTok as he felt it would affect his sound and creative visions.

As the industry evolves, labels are shifting too. These days, many are offering more artist-friendly deals, with better transparency and allowing artists to keep ownership of their masters. The goal? To create a fairer, more collaborative partnership between labels and artists.

How Do Record Labels Work In The Digital Age?

Just as the way we consume music in recent times has changed, so has the way the Record Labels function has changed as well. Physical music sales (CDs, Vinyls, Cassettes, etc.) have seen a decline ever since digital downloads made their entry into the music scene and it all changed again when streaming followed. The Record Labels have had to adapt to all these changes. 

The digital landscape is a huge playground of sorts. With the music-making process being more accessible and simpler, it becomes a priority to stand out of the crowd with your music. Nowadays, record labels A&Rs (Artist and Repertoire) are constantly scouting digital platforms like TikTok and YouTube for the next viral sensation. In the digital age, record labels leverage data from streaming services, and social media metrics to discover talent and predict what might blow up next.

Record Labels still play a crucial role in the digital music ecosystem, bridging the gap between artists and listeners. They take care of all the heavy lifting—handling licensing, distribution, marketing, and even copyright protection. Labels are also the ones negotiating with digital platforms, securing those coveted playlist spots, and promoting music across multiple channels.

What are the Effects of Social Media on Record Labels?

Social media has changed the game for everyone—artists, fans, and record labels alike. For artists, it’s a direct line to their audience, allowing them to promote their music, share behind-the-scenes moments, and even release tracks without a label. For record labels, social media has become a goldmine of data and a key promotional tool.

Labels now monitor how artists are trending on platforms like Instagram and TikTok to gauge their popularity before signing them. Social media can also make or break a song release. While the ongoing debate about the effects of social media on the music industry is worth getting informed about, one cannot deny that social media plays a central role in the music industry.

Record Labels are using social media for marketing and promotions, and artist discovery. However, these practices have received their fair share of backlash as well. For example, Halsey quit her ex-label due to them not letting her release a track until it could create a “viral TikTok moment” and there have been instances where Record Labels have denied to sign artists because they didn’t have more than a certain number of followers on their social media.

Record Labels also monitor content and music through social media analytics to see what has the potential to blow up and become a chartbuster. However, this practice has been criticised for being too technical and curbing artists’ creative freedoms as well.

How Does A. I Affect The Record Labels?

News Flash- A. I has breached the Music Industry! From curating Spotify playlists to producing new sounds and making entire tracks, artificial intelligence is also changing how labels operate. The Record Labels use A.I. to analyse streaming data, predict trends, and even automate parts of the production process.

Some labels have started using A.I. to help discover new talent by analysing social media activity, engagement, and other digital footprints. And while it might seem like the labels might be profiting from it, the threat to creativity still lurks as the labels will push A. I content over organic ones as it is easier, cheaper and faster to produce. 

The Beatles recently released ‘Now and Then’ one of their old demos which was made into a song using A. I to recreate John Lennon’s voice. The Major Labels sued A.I Music Generating Software like Udio and Suno for unauthorized use of copyrighted content. However, using A.I could help the Record Labels streamline its practices which require extensive efforts such as Music Metadata, Optimizing Catalogues, Managing Royalties, Playlist Curation, Data-Driven A&R Decisions, etc.

What Are The Problems With Record Labels?

Of course, it's not all sunshine and rainbows with Record Labels. There are examples of the biggest and most popular artists being exploited by their labels. However, the problems need to be addressed so that one can decide whether or not they are getting a good deal out of being signed. 

• Profit Over Art: Labels tend to chase chart-toppers over artistic integrity. This can mean pressuring artists to crank out music that fits market trends, instead of letting them experiment and explore their creative vision.
  
  
• Contracts and Royalties: Many artists find themselves stuck in contracts that favour the label, leaving them with a small slice of the profit pie. Even with a hit, some artists struggle financially because the label gets to keep the profits.
  
  
• Control and Ownership: Labels often hold the rights to an artist’s music, limiting their control over how their songs are used or distributed. This can be frustrating when you can’t decide what happens with your own work.
  
  
• Limited Artistic Freedom: Some labels set strict rules about the type of music an artist can create, leading to a generic sound that stifles diversity and creativity in the industry.
  
  
• Promotion and Marketing: Labels control the purse strings when it comes to promotion, meaning only certain artists or music genres get the push they need. Others? They might get left in the dust.
  
  
• Exploitation of Emerging Artists: New artists are especially vulnerable, often pushed to deliver hits without enough support or guidance, leading to burnout or unrealistic expectations.
  
  
• Gatekeeping: Labels often act as gatekeepers, making it tough for indie or non-mainstream artists to break through and access the same resources as big-name acts.
  

Final Thoughts

The future of Record Labels is anything but uncertain. The growth of artist-run record labels might be a welcome change for the music industry but it also requires the use of both traditional and contemporary industry practices for both indie and label-signed artists to thrive. Whether you're eyeing the freedom of going solo or the support of a label, the choice comes down to what fits your goals. The music industry is constantly evolving, and no matter what path you choose, the key is to stay true to your sound, adapt to the digital landscape, and keep your creative spark alive.

We at GreaseRelease, have a bunch of curators on our network who are looking for new & exciting music to push on their massive playlists. If you make music and want to reach a wider audience, check out our submission platform and get a chance to reach millions of listeners! Submit your tracks now!