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Module 5

The document discusses the structure and functions of major record labels and independent labels. Major labels have extensive global operations, multiple subsidiary labels, music publishing businesses, and distribution systems. Independent labels have fewer resources. Record labels perform various functions like A&R, legal, marketing, production, and finance. They develop artists through the deal phase, creation phase, delivery phase, and distribution and monetization. While technology has changed the industry, the core functions of labels in developing and promoting artists remains similar.

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101 views3 pages

Module 5

The document discusses the structure and functions of major record labels and independent labels. Major labels have extensive global operations, multiple subsidiary labels, music publishing businesses, and distribution systems. Independent labels have fewer resources. Record labels perform various functions like A&R, legal, marketing, production, and finance. They develop artists through the deal phase, creation phase, delivery phase, and distribution and monetization. While technology has changed the industry, the core functions of labels in developing and promoting artists remains similar.

Uploaded by

api-531060699
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Module 5: The Record Industry

Objective: Study the fundamental concepts of the record business

 The record business provides similar qualities of the entire music industry
o Creativity, intellectual property, contracts, artists, managers, and lawyers

Major vs. Indie labels

 A major label is a multi-national record-oriented conglomerate with diverse revenue sources


o The three major labels are Sony Music Entertainment, Universal Music Group, and
Warner Music Group
 All major labels have:
o Extensive offices and operations in key cities around the world
o Many subsidiary record labels included in ownership
o Each has many businesses in its portfolio
o A large and successful music publishing business
o A well-constructed and viable physical distribution system for its audio products
 Unless a record label is associated with one of the three major labels, they are considered
“indies”
 There are pros and cons to both labels when it comes to people, resources, products,
incubation, success, publishing, and distribution
o Each kind of label has both advantages and disadvantages therefore every artist will be
different in which label would be the best for them

Company Structure/Functions

 Each label has to perform the same number of functions


o Typical offices include:
 President/CEO, legal business affairs, accounts, royalties, international,
marketing, A&R, sales, promotion, admin producers, advertising, publicity, and
artist relations
 There are functions that need to be performed in order to get any recording project finished

The Deal Phase

 Labels develop brands that reflect the companies place in the market
o Primary people in the deal phase are the president, legal department, and A&R
departments
 The label president is the primary leadership position of a record label
o Visionaries and entrepreneurs
o Must have leadership and business skills to make plans for carrying out a company’s
vision
 Legal Department
 Companies of a moderate to larger size have a legal office, or general counsel. Smaller labels
tend to just keep an attorney that is able to step in as a legal representative on short notice
 Artists and Repertoire (A&R)
o The eyes and ears of the record label
o Find the artists whose recordings will sell
o Employees of the label or independent contractors

The creation phase

 First label recordings


 Producer
o Person responsible for every step of the recording project
o Not the same people who do the technical work of recording an artist
 The Art Director develops a “look”
 Ties together visual elements of an artist and their audio project
 Replication
o Producing the physical product in large quantities

The delivery phase

 How the project is going to be introduced and made available to the public
 Sales
o Physical product and digital/streamed delivery
 Advertising
o Makes customers aware of a label’s offerings
 Publicity
o “To get people talking” about the projects that the label is producing
 Distribution
o From the time an audio project is made and delivered to retailers
o to give to the consumer
o delivered to retailers who give to the consumer
o delivery of a non-physical product
o appropriate platforms for public access

Distribution and Monetization

 Social media and streaming outlets


 Record promotion entails efforts made to get a record company’s tracks added to ratio rotation
lists that broadcast

Finance Office

 Accounts payable and accounts receivable


 Advances
o All advances a record company offers serve positive functions and all payments are
made in advance of earning any money
o Subject to recoupments by the record company
 Cross-collateralization
o Positive earnings from recouped categories will be used to repay the negative earnings
categories of music video and tour support
 Chargebacks
o Expenses for a project charged back to the artist
 Includes packaging deduction, breakage reduction, free good reduction
o The artist basically pays for the packaging of products

Technology has changed the music industry with new ways of recording

The majority of recording projects fail, just about 9 out of every ten fail

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