The music business can be a brutal business. There are many decisions an artist must make to enable them to go out and have fun creating their music and getting it out to the fans. An artist can choose between major and independent record labels. The first thing an artist must do is to choose the right path to get their music to the masses in a way that will most benefit them. The most important decision they must make is how they will deliver their brand to the music lovers. They can have their music shared with the world by either being signed to a major record label or through an independent music label. Both types of music labels have some things in common, as well as many differences. There are advantages and disadvantages to both Independent and Major record labels. The artist must weigh the pros and cons to decide which one could be the right path for them. Let’s look at both types of record labels and discover what they have in common and how they differ.
There are many differences between the major record labels and the independent labels. One major difference between major and independent labels is the financial aspect. A major record label signs who “they” consider to be the most popular, and the major players of today’s music. The major record label has the means to obtaining and using hundreds of millions of dollars, which allows them the ability to fund and promote the artists they sign in a variety of different media aspects. Whereas an independent music label does not have the huge funding that a major label does for promotion. An independent artist must contribute to helping promote their music. While this may not be something every artist would want to do, an independent artist that is hands on with their promotion is able to form a personal and unique bond with their fan base.
Most major record labels artists earn a 10-15% royalty on their music. But before an artist can receive their royalty their label must be clear of any debts relating to their music. Such as touring costs, album and video production and any advances the artists received. Money made from the music will first go to the label until all debts are covered, before the artist will ever start to receive any royalty’s. Whereas, independent record labels offer a much higher royalty rate, because independent labels production costs are much lower than those of major labels. An independent label is common to offer the artists 40-75% in royalty’s. This royalty rate lets the indie artist make much more off their brand than a major label artist will. However the indie artist will not have the promotion blitz that a major will, so their brand will not go out to as wide an audience. Major label artists reach a larger audience through the promotion blitz their label uses, and via radio play, most times however, if the label decides they are not bringing in the money that they should they can drop them. http://www.docstoc.com/docs/6286199/Indie_-music-
Most major label artists are not hands on with their fan base through online social media sites. They are not using this important and free promotion capability. Independent label artists however, utilize all aspects of the internet such as, Twitter, Face book and other social media sites to interact with their fans. This creates a friendship of sorts with the fans. Friends want to see you succeed and help you in any way that they can to help you reach that success. By indie artists forming these friendships with fans, the fans will buy their music and go to see them play. The interaction creates fans that will stand behind the artist through thick and thin and help with promotion, this fan promotion in turn brings new fans on board. All this relates to more sells and more popularity for the indie artist.
Another difference between major and independent labels is the actual contracts they sign. An independent artist has a huge benefit that a major label artist does not. Independent artists are able to keep the rights to their music. Once their song is recorded the indie artist can do what they like with the song. They are able to reuse it for movies, television or any other projects that wish and they will benefit from the money the song brings in. On the other hand is the major record label. Major record companies are a business and they make sure that they profit as much as possible from your brand and music. The artist signed to a music label will not keep the rights or control over their music. Many artists are starting to feel that losing the rights to their music is not something they are willing to do and they are opting for the flexibility and the creative control that an indie artist receives by signing with independent music label deals. These are just some of the differences that artists must consider when deciding whether to market to a major or indie record label.
There are well known artists who have walked away from the major labels and they have taken their music to the independent labels. Some have created their own labels. Two such artists are Jeff Timmons (formerly of 98 Degrees) and Taylor Hicks (American Idol, Season Five). In interviews each artist addressed their decision to create their own independent label. Jeff Timmons was asked about his decision to create his own label and become an independent artist.
Well I think the record labels are kind of in a quandary right now. They’re having trouble selling records right now for multiple reasons. Not just because of downloading, but because there is not as many retail stores selling records any more. They don’t have the budgets anymore that they use to have to promote the music. They try to control you, and they try to control your music, and it is hard to make money off your own music. So I thought why not just do it by myself. I sort of have a grasp of the business side of it. It’s more about getting my own music out there for the fans to share and enjoy and building my own fan base and being able to create this music for a living and continue that process. So I don’t feel a necessity to be with a major label anymore. http://www.associatedcontent.com/article/2549197/interview_with_jeff_timmons_pg3.html?cat=49 2010
When Taylor Hicks was asked about his decision to release his second post idol album through his own independent label he had this to say.
I felt like I was at that stage where I could really express myself from an artistic stand point and kind of live out on the edge with my art and my songwriting. I just feel like that creates drive and I need a lot of drive. That is the reason why I created the label. Ultimately I want to sign acts and use my knowledge and experience to help others. http://www.associatedcontent.com/article/1541187/discussing_the_distance_with_taylor.html?cat=33 2009
When asked about the obstacles that Jeff Timmons faces by being independent verses going with a major label he had this to say.
Well with a major label they have the resources and the funds to promote you in a big way with television and radio, aside from that you can do almost anything else yourself. You can get distribution yourself, sometimes even more than with a major label; you can utilize the social networks more than the major labels do. You can also create awareness and viral marketing and build your fan base, and be up close and personal with your fans. You don’t have someone from the label telling you what you can and can’t do, and stopping you from doing what your gut says. I think it’s a trade off, but to me I would rather be able to creatively control my stuff and get it out when I want, and also to who I want to get it out to. I’ll save radio for another time maybe. http://www.associatedcontent.com/article/2549197/interview_with_jeff_timmons_pg3.html?cat=49 2010
Artists must decide if they want the huge push a major label can give them, possibly making them a huge name in the entertainment industry, but also realizing they will be giving up a lot of their rights and money. This is in contrast to the independent label. While the funds are not available for the huge push to get their brand to the masses. The artist and indie label can use the internet and the fan base to get the music out the masses. The artist will also keep creative control of their brand, and a lot more of the money they make goes directly into their pocket. The artist is taking a gamble on whether they will get their music out to a broad enough audience to gather a huge fan base. However the artist who signs with an independent label can be assured that much more of the profits they garner will go directly into their pocket than it would with a major label. Some artists end up making more money with an indie label than an artist does who is with a major label, because the indie artist gets more money into their pocket per CD sold, etc.
Independent and major label record companies have a couple things in common. They both make and sell music. They both have their own unique ways to promote their clients. Both also are in the business of discovering and promoting the next great artist. However, that is where the similarities end. How they get to the end product and what the artist gains or gives up greatly differs between being with an independent label verses a major label.
Although a major label has the funds and ability to promote an artist and get their music to the masses, the artist will lose their creative control, and most of the revenue from their music goes to the major label. The indie artist has to work with the independent label to promote their music, and there is no huge amount of funds to help with promotion. However, the indie artist keeps control of their music, and receives much more revenue from the music into their pockets compared to the major labels. It is up to each individual artist to find out which label contract would best suit their needs.