About the Relevance of Record Labels

About the Relevance of Record Labels

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Brave new digital (music) world?

If you had to invest a lot of money in the marketing machinery in the past, you could do it yourself through social media with Facebook, Instagram and co. Whether newcomer, already established music artist or also actors of completely different industries - there seemed to be no limits to self-marketing. Social Media seemed to be THE marketing tool. It revolutionised classic marketing methods - a new era began with the rise of so-called social media stars.

The music industry was also affected by these developments. Music labels no longer had the same meaning as before. Musicians could suddenly be the blacksmiths of their own happiness, interact personally online with large crowds of people, discover the opinions and needs of their fans, and build an emotional connection through personal messages. Planning and executing a release in DIY style seemed simple and therefore attractive - especially for musicians without a label. But…

But musicians who successfully emerge from the DIY model are an extreme exception. Artists like Tom Misch or Annenmaykantereit, who are often referred to in the DIY context, now have a record label behind them that has helped them to their ultimate breakthrough. Artist development, sales and booking, tour planning, marketing and release campaigns - all this can be done without a label. But only very few are able to find the required funding, the time and energy to replace a multi-headed team and take off on their own.

Another important aspect in the consideration of taking everything into one’s own hands as an artist is time. Management and administrative tasks are not simply done by themselves. The time that inevitably has to be invested here is taken away from you as an artist in your own core competencies: Creating music, preparing and playing concerts, communicating with fans. Productivity in these areas will be decreased as a result.

Business Network

So they are reliant on capable people to support them. A professional network is therefore crucial for a DIY artist (and actually for everyone in the business). In addition, Facebook and co. are of course not a saviour, but companies that act purely profit-oriented. So why offer marketing for free? The Facebook algorithm is now being changed on a regular basis and the organic reach is being continuously reduced, with the result that posts by artists only reach a tiny fraction of fans. If you don’t invest a considerable amount in Facebook advertising as an unsigned artist, you have little chance of a high reach. In addition, the advertising campaigns must also be very precisely targeted in order to ensure that the followers and reach also correspond in terms of quality to what you want to achieve. So social media is not the magic bullet.

UMA Music Group

The UMA Music Group pursues another novel approach. They have made it their business to put artists without a record contract into the spotlight. As partners of Live Nation, Solo Booking and an association of successful personalities of big labels, they set up artists as companies. They invest in album productions and draw up business plans. They are involved in artist management, marketing, PR and legal matters. UMA takes a certain percentage of the artists’ income, reinvests this share within three to four years and thus buys itself off the company. This is more or less a classic management buyout at this point. Artists who have been able to perform on big stages without a label deal with the help of UMA Music Group include Alex Francis and Elle Exxe.

United Masters

United Masters also wants to replace the traditional music label. The marketing platform is intended to support musicians in promoting their music. The business model of the start-up, which is led by Steve Stoute, who has made Nas and Will Smith famous, is as follows: United Masters places the music of their signed artists on different streaming platforms and provides information to their clients: Who’s listening? Where is it heard? How much is it heard, etc.? They also support relevant brand partnerships. For example, if fans of a certain musician are looking for a certain product online, advertisements can be displayed with his music. In return, United Masters will participate in revenues generated from Spotify and co. However, United Masters does not give an advance for productions. The financial risk lies solely with the artist. If the artist needs studio sessions and sound engineers, a label deal could still be the better solution. A publishing deal could also be interesting, as it integrates more and more conventional label work into its business model in order to become more competitive.

The ‘traditional’ Record Label

Alternatives to record labels are therefore sufficient. Which business model is the right one for you as an artist manager as well as an artist without management should be individually evaluated. As mentioned above, you can also achieve a lot in DIY manner. But if you don’t have the necessary experience in the business, it’s usually best to work with a label.

Of course the above also applies to labels and management following the DIY principle. If, in addition to the core tasks such as music release and marketing, a label wants to distribute the booking of artists, merchandise, develop and implement a sophisticated social media campaign, produce videos on its own or create the label website, it either needs the appropriate and required manpower or is distracted from the core tasks. However, once manpower is in place, a label is still a powerful partner for starting or developing a musical career. A label offers many advantages, which are among other things very attractive from a financial point of view. Advances for productions, instruments and promotion are just a few of them. Artist development and coaching can also be taken over by the label and help you to lay a solid and well thought-out foundation, as they benefit from years of experience and know the market best. They usually have an established network and a clear brand image with business partners and consumers. So their task is to invest time and money in artists and their development in order to reap the fruits of their development work if it is successful. In summary, a label is an extremely reasonable way to gain a foothold in the music industry.

Note: Be sure to define the goals you, as a manager or musician, are pursuing in your work in order to keep track of what is suitable for among the large variety of options. Where are you going with your music? What do you want to achieve together? What do you value? Find out exactly about companies, their conditions and business models to find out which can meet your needs and offer you added value.

Further tips on networking are given by our interview partners in our video series “The Power of Networking”: .

Also interesting in this context:

“Why a strong network is crucial for success”

“A&R and Networking with Tjark Hartwig, Four Music, Sony Music”

In this sense: Happy Networking!

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