So many artists are signed to different labels, but they are extremely popular. How does a label work and why would an artist even want to sign to one since labels typically get a percent of money. Also, I thought independent or indie artists were not signed to a label but if you go to Spotify and look up indie music half of them are signed to a label.
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Recording, printing, distributing, and marketing albums is a very expensive endeavor. Far more costly than an unknown artist can likely afford.
Historically record labels would find talent, promote them, and loan them money to record, print, and market their albums. Labels would have distribution channels in place to sell records and get songs on the radio.
All of this in exchange for a significant share of the profits.
By the 00’s big record labels started going out of fashion. Labels had become predatory organizations and stories about how even big name stars like Destiny’s Child were broke because of 1-sided contracts became big news.
Contracts would be written to take a percentage of gross profits rather than net, and record labels were asking for a percentage of concert sales and merch which they had never done before. Bands would sign, get a large cash grant up front and they find themselves in debt they couldn’t pay themselves out of.
Record labels would also try to own publishing rights, meaning that artists would effectively lose control over their own work.
Bands stopped wanting to sign with big labels, and labels started signing larger numbers of bumble gum pop acts, rap stars, and boy bands that they could easily milk for money.
The record industry would blame Napster and internet piracy for an industry wide drop in sales while that was only a part of the problem. Albums had been going down in quality while consumers were turning to new media formats on the internet to get their new artists. People stopped listening to Radio, and MTV started playing nothing but reality TV.
New talented and interesting groups are being overlooked in favor of the next viral boyband or rap star.
The internet allows for small no-name acts to market themselves and sell albums on newer platforms giving them an alternative than dealing with big record labels. While streaming platforms don’t necessarily offer good rates, dealing with them gives artists far more control over their own music, merch, and tours.
Smaller Independant labels meanwhile try to attract musicians by offering more control over their work to compensate for the lack of major financial backing.
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