As an artist trying to break into the wider music industry and earn a living out of your creativity you may be psyched to get signed to one of the ‘big four’ – Universal Music Group, EMI, Sony Music Entertainment or Warner Music Group. This being said, a glance at the music industry news will give you a brief idea of the trouble some of these majors are in. EMI this week reported loses off $802 million. What the news won’t tell you is the number of artists contractually tied to the major labels, but not earning any money and finding their creativity restricted by major record label’s commercial expectations.
Things are very different at an independent record label. Depending on your goals as a recording artist and your financial goals independent labels may be able to cater better to your music. Although an independent may not have the connections, distribution links and finances to push 1 million copies of your latest album, they can create higher value out of the sales they do make. Whereas with a Major you will be fronted with a substantial advance and then they will spend a considerable amount on recording an EP/First album for you – the money they spend is far from free money. Many acts do not produce the turnover that recoups this initial investment from the label – and therefore do not see any of the money produced from their sales. Many independent labels have a different approach – work within an appropriate budget that can be covered by future sales. The record label does not make a large risky investment and potentially lose a lot of money, and the band gets to see the earning they make from CDs – whether they’re pushing hundreds or thousands. Independent labels may not be as profit driven as the majors – but somehow they often end up being more profitable.
Major labels are so desperate to recoup the investment they’ve committed to an artist that when the act doesn’t succeed by their standards they may cut off additional funding to market and develop the act to cut their loss. The band is then stuck signed to a label that is unwilling to invest further in them. Independents, who have lower risks, can spend time developing an act, building a fan base and establishing a marketing plan that works for the act. This patience allows an artist time to develop and grow organically without costing everyone a lot of money.
Most of all Independents, due to their general small size, have the opportunity to be more flexible and take advantage of new markets, new products and new marketing techniques without the bureaucracy that comes alongside a large company. Independents out of the reach of major labels have the ability to create scenes and work within the local community and music industry to build a scene surrounding the artist. Local hype can very quickly turn into national hype. If the music you produce is not radio friendly, it may very well not be major label friendly. Independents can find you your niche and sell your music in a unique way.
If a deal comes your direction from a major record label – congratulations. But before you sign on the dotted line keep in mind that an Independent label might be just what you need to succeed as an artist.
/Lucy
August 20, 2010