The Function of a Record Label in Music Publishing: Then and Now

In the past, it was virtually impossible to grow a large audience as an independent artist, because in order to grow an audience artists needed media through which to publish their material such as vinyl records, radio, cassette tapes and television which were one of the only ways of listening music at the time. As you can imagine, the production and upkeep costs of materials such as vinyls was were immensely high, with an average price per unit between $1.50 to $3.00 depending on the durability of the vinyl and its production size (Richard, 2023) This economical difficulty of distributing music led to a lower supply of artists, as startup costs were extremely high for publishing music. This resulted in less market competition which subsequently led to the development of giant record label companies such as Columbia Records, RCA Records and Warner Bros and many more

Essentially, the function of a record label was to lend money to prospective artists in hopes of them becoming a hit, with in return the record label owning a percentage royalty of a track in hopes of eventually paying back the initial investment

In the modern days, with the rise of digital streaming, the costs of publishing music have dropped practically to zero. Through digital music distribution services such as DistroKid, TuneCore, CD Baby, etc, its has become effortless for anyone to upload their content to stream on- demand digital service providers such as Spotify, an audio streaming company occupying 31% of the audio streaming market share in 2023. (Sucic, 2023)

What does this all mean and why is it important? The answer is that there has been a tremendous spike in independent artists over the past decade An independent artist is a business entity that operates solely, without a record label, and takes on their own responsibilities such as publishing, marketing, and building their own brand, saving production and marketing costs as less human labor is involved. In fact, 87% of Spotify's total streams in 2017 were from the big labels; however, that percentage dropped to 85% in 2018, 82% in 2019, 78% in 2020, 77% in 2021, and 75% in 2022 Over 9.5 million tracks were released by independent music artists around the world in 2020, 8 times more than the 1.1 million tracks released by major labels. (Room, 2023)

With the rise of many famous independent artists such as JVKE through independent social media marketing, it has become easier and easier to become “famous overnight” through the algorithmic growth of different social media platforms such as TikTok, Instagram Reels and YouTube Shorts (Brown, 2022) This shows the significance of how it is now possible for an artist to become successful without a record label deal nowadays. A study by M. Daniels in 2022 investigated 125 viral independent artists that were previously unknown, and indexed them by several factors such as whether they’ve signed a record deal, whether they have 1M+ Spotify monthly listeners, 100K YouTube Subscribers and other demographics These factors were hypothesized to contribute to an artist’s sustainable music career.

“Let’s assume that most musicians use TikTok as a marketing engine to get famous elsewhere I’ve seen countless TikTok influencers push their YouTube channels in order to be YouTube famous, where the perceived legitimacy (and money) is ” said M Daniels The transferability of an artist’s audience does play a large role in advertising on different platforms, as video streams from Tik Tok do not generate revenue, and in order to have a revenue stream, the audience needs to be transferred to another media, such as Spotify or Apple music, which pays artists royalties per stream and conversion happens. That is exactly what independent artists are doing right now, gaining their audience on viral platforms like Tik Tok, and then leading them to a converting platform.

Bibliography

Brown, H (2022, May 31) We tracked what happens after Tiktok Songs Go Viral YouTube https://www.youtube.com/watch?v=S1m-KgEpoow&t Daniels, M. (2022). The unlikely odds of making it big on TikTok The Pudding https://pudding cool/2022/07/tiktok-story/

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Global Music Subscriber Market Shares Q1 2021 MIDiA Research https://www midiaresearch com/bl og/global-music-subscribermarket-shares-q1-2021

Richard, D (2023, February 19) How much does it cost to make a record?. Top Record Players. https://toprecordplayers.com/howmuch-does-it-cost-to-make-arecord/#:~:text=Price%20estimates %20for%20creating%20a,to%20ma ke%20a%20vinyl%20record.

Room, C (Ed ) (2023, April) The rise of Independent Music Artists (updated 2023). calypsoroom. https://www.calypsoroom.com/The -Rise-of-Independent-MusicArtists html#chapter3

Sucic, P. (2023, February 21). 40+ spotify statistics: Users, revenue, Market Share (2023)

HeadphonesAddict https://headphonesaddict.com/spot ify-statistics/