Record Labels
Record labels enable artists to treat music making as a full-time career by providing advances and marketing/sales support. The labels, in return, make their money back by exploiting the artists' music commercially, then collecting the music royalties on the artists' behalf, while taking their agreed share along the way.
Most of a labels income, around 25%, is pumped back into the A&R (artist and repertoire) department, whose job is to find, sign and develop new talent.
Typically the recording and mixing of albums is paid for by the labels (this money is then recovered at a later date through the exploitation and sale of those recordings). Aside from the labels job of manufacturing and distributing the artists' recordings, another important role they play is to promote and market the artist.
Labels can also seek out other ways for the recordings to be exploited, such as being used in movies and adverts, and license rights to global parties in different markets.
They're are two different types of record labels; majors labels and indie labels. The major labels (also referred to as the big four) dominate the music market, usually occupying about 70-80% of the worldwide market. The other 20-30% is shared out amongst the thousands of indie labels and self releasing artists.
In today's world the major labels are just a small part of a bigger umbrella organization which we call a music group. A music group is usually owned by a global holding company, typically having non-music divisions as well. A music group is in charge of record manufacturers, music publishing companies, record labels , and distributors.
Within each of these major labels there are also sub-labels. For instance, Atlantic Records is a subsidiary label of Warner Music Group. What this means is that although they can sign artists and make most of their own financial decisions they are still answerable to the central label, Warner Music Group.
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