Are Major Labels Dying?

The robust nature of the Internet has put most industries at either an advantage or disadvantage to carry out their business.

The music industry is one of the industries that relies on the Internet…..but record deals have come into question because most artist’s are pretty much able to carry out their own promotion, marketing, branding and distribution on their own.

This then brings about the question:

Are major labels dying?

Granted, major labels have encountered numerous pitfalls over the years due to many incentives allowing for independent artist’s to carry their careers without the need to be signed to record labels….but major labels have adjusted their mode of operation by reformulating their strategy to be able to increase artist opportunities making them relevant even in today’s advanced music landscape. So, No, major labels aren’t dying. They’re only getting started.

Bargaining power of major labels

While most people would think or assume, labels are being put out of business due to the fact that most artist’s are choosing to go the independent route…this is only true to a very small degree.

Below are the various key factors that make major labels not only necessary for the music industry but essential.

Money

The very first thing we have to look at is that major labels still have the financial muscle to be a major player in the music industry.

Independent artist’s can succeed on their own if they can handle all the financial necessities required to fuel a Music career…. but this is a stretch and to be honest most musicians just don’t gave the finances to compete with artist’s signed to record labels.

Major labels have great financial capabilities that allow them to sign artists and be able to advance them money, handle their production costs as well as all the marketing and promotion costs necessary to sell records.

This is why major labels are still alive today.

Connections

The extensive reach that major labels have is one of the things that keeps them operational. They not only have connections in the music industry but in other industries aswell.

Independent musicians can take on their careers without labels but limitations will exist due to the fact that they lack the necessary connections as well as the reach.

Most musicians don’t only sign to major labels because of the financial support that they can offer. They also sign to major labels to be able to take advantage of the diverse network that these labels can give them access to.

Which is why major labels are still in existence. They’ve been able to reestablish their power in the industry by playing to their strengths as well as implementing new diverse strategies that, not only encompassing the Internet but other various technologies that have come to life because of the Internet.

This has given them even more reach and connections into the industry. For example, Most major labels are now partnering with services like Apple Music and Spotify which makes their strategy even more full proof.

Validation

Another reason why major labels are still relevant and are a part of the industry is the validation and credibility that they give to musicians and artists.

Being signed to a major label gives artist’s the potential to demand for higher pay in situations that call for it e.g. Shows, licenses etc. and this is possible because of the credibility that being signed to a major label provides to the artist.

Think of a situation where two people are competing for the same job and one of those two people has a degree while the other one doesn’t. Ofcourse the person with the degree stands on higher ground and is more credible and hence can get hired.

The same applies to artist’s signed to major labels, they have credibility and that is enough validation for them to have greater Bargaining power.

The Necessity of Major labels

The fact is that almost 90% of the mainstream music you hear today is from artist’s signed to major labels.

Today’s superstardom relies on the artist being signed to a label because the media industry would not allow independent artist’s to reach Superstar status due to the fact that music is being used mostly for advertisements….and most of these entities like media are run by the major labels that they have to cover.

This brings about conflict of interest because the media industry to some extent is being run by major labels. Therefore, for artists to be able to reach great heights, a record label deal is almost always necessary.

With that said, It’s important to emphasize that some independent artist’s are finding their way around the music industry with little help from major labels.

Even so, these cases are still rare which is why most artist are still looking to major labels for help to advance their careers.

The Downside to Major Labels

Control

One of the downsides of artist’s signing to labels is that they have to give up a certain degree of control when it comes to their careers. Major labels operate as an organisation that helps artist’s create products that they can sell so both the label and the artist can benefit.

Therefore, major labels employ various methods and tactics of operation to be able to make money and recoup their investment as well as make a profit.

Some of these methods will involve the label intervening in the artist’s creation process, brand and overall message.

Enslavement

The second downside to working with a major label as an artist is because of Enslavement.

Most of these deals will stipulate how many albums an artist will have to do for them to be able to honor their side of the agreement.

Furthermore, these albums have to co-owned by the major label in most cases and at times they may demand something as higher as 80% of the sound recording copyright. Which pretty much leaves the artist’s with very little ownership.