Major Record Labels Are Majorly Falling Behind.

The music industry has been in a downward tailspin for the last 25 years. With the development of social media and online streaming services, traditional music marketing and sales techniques have plummeted. By this time, we all know just how much these streaming services have seeped through the industry causing havoc. But what many people don’t know is that for the first time in music history, independent music labels are doing better than major record labels. At this years Grammy’s “in indie publishing, Kobalt said its songwriters Max Martin, Shellback, Ryan Tedder worked on Swift's album of the year, also noting that another of Kobalt's songwriter/artists, Lionel Richie, was the recipient of a tribute, along with Skrillex taking Best Dance Recording, among other awards” (Christman.) This was a huge win for the independent label community because it finally symbolized how maybe artists can have it all.

The reason these independent labels are doing so well is because they now hold control over crucial rights that were previously monopolized by major record labels. But now, with the Internet and other streaming services artists are no longer in need of a corporations funding or network. Independent labels explain how “we used to be able to develop new talent without owning master rights, but these days, because Internet marketing and film, TV and advertising promotion is such an important part of development, we need to own or administer the masters as well in order to expand the development opportunities and ease the licensing issues,” (Kramer.) The music industry and artists are in constant struggle over publishing and master rights. Publishing rights are given to the person who owns the rights to the composition or the “author” of the music. The publisher must give consent for someone to own the actual music to distribute it, which is known as “right clearing.” Essentially they own the copyrights to the music and can license the master rights out.  Master rights are also known as recording rights. Whoever has these rights owns the actual recording of the song’s sound so they are entitled to royalties. These usually belong to whoever financed the recording and they also give permission for the recording to be used or performed. Publishing and master recording rights are where a majority of money is earned. Since record labels used to monopolize these rights, they were making 63% of the profit within the music industry.

                                                       

 Masnick, Mike. "RIAA Accounting: Why Even Major Label Musicians Rarely Make Money From Album Sales." Tech Dirt.Web. 13. Jul. 2010.  

 Originally major labels offered artists resources that they otherwise wouldn’t have had access to before. This included funding, studio time, equipment, networking, management, marketing and a plethora of other perks. More importantly it provided artists with a sense of stability within the industry. In return, the label would see profits from owning the master rights since they financed it’s creation and would have in house publishing deals that would rarely cut deals to artists. Labels would lock artists into contracts that would require artists produce a certain amount of albums, sell a certain amount of albums and if not you would be in breach of these contracts thus being in debt to your label. However now it is easier than ever with the Internet and streaming services for artists to do it all themselves, without the help of a label. When technology advanced, artists caught on to the fact that they could make more money by keeping the publishing rights and master rights to their songs by making everything themselves. Everything from production and marketing would now be 100% for the artists instead of having to split between the departments of a label. Now the four major record labels, Sony-BMG, Universal Music Group, Warner Music Group, and EMI are being forced to adjust.

Independent labels began to become a safe place for artists who now would be able to have creative control while also keeping their music rights. “The interesting thing about this trend is that ownership of a label grants a publisher exclusive rights to master recordings. This opens the floodgates for all sorts of new revenue streams and promotional opportunities” (Kramer.) Now artists can play their music when they want, how the want, and for how much they want.  Major artists such as Adele, Mackelmore & Ryan Lewis, Diplo are all products of independent marketing and label deals. With “major label companies are now in a transition period, and are struggling to come up with the end-all-be-all solution to all of their problems,” (Ostrow.) Now major labels have sought to buy parts of independent labels in hopes for trading percentages of publishing rights and other access to their artists. This can be seen with Adele who is also in partnership with Columbia Records and Universal Music Group. In return, these major labels offer promotional funding since a majority of artist’s money is made through touring.

With this flux within the music industry I believe that the independent label circuit will create finally for fair compensation to artists for their music. They will no longer be forced to churning out singles or albums in order to fulfill contract requirements and instead be able to bring actual musicianship back to the music industry.

Works Cited

Chirstman, Ed. “Grammy Scoreboard – Tallying the Major & Indie Label Wins.” Billboard. Web. 16. Feb. 2016. <http://www.billboard.com/articles/news/grammys/6875502/grammy-scoreboard-major-indie-label-wins-universal-warner-sony?utm_source=Sailthru&utm_medium=email&utm_campaign=Daily&utm_term=daily_digest >

Kramer, Evan. “The Publisher as a Record Label.” Music Business Journal. Berklee

College of Music. Web. Oct. 2010. <http://www.thembj.org/2010/10/the-publisher-as-a-record-label/>

  

Masnick, Mike. "RIAA Accounting: Why Even Major Label Musicians Rarely Make Money From Album Sales." Tech Dirt. Web. 13. Jul.
<2010 https://www.techdirt.com/articles/20100712/23482610186.shtml>

Ostrow, Jonathan. “Indie vs. Major: Which Record Label Contract Is Right For You?”

Music Think Tank. Web. 10. May. 2015.  < http://www.musicthinktank.com/mtt-open/indie-vs-major-which-record-label-contract-is-right-for-you.html>

Media Clip: https://www.youtube.com/watch?v=ofn0b9OTyP4

“Artifact” (2012)

Start: 2:10

End: 4:30