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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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.
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