How Record Labels Work

Music Moguls vs. The Indies

As it became more and more difficult for bands to get signed by the huge record labels, independent record labels began to pop up. Independent record labels (also known as indies or garage labels) can be as large as some of the smaller corporate record companies or as small as one or two people. According to Music Biz Academy, the reason that so few independent record labels succeed is due to the sheer amount of money, work and time it takes to run a record label.

Now that you understand the organization of a record label, you can see how difficult it would be to have to take on the job of A&R, artist development, marketing, publicity and sales with only a few people. The larger record companies succeed because they have the money and power to hire many people to do all these jobs. At an independent record label, it may be the same person who discovers the artist or band, calls the radio stations about getting airplay and arranges the artist's publicity. That is not to say that independent record labels cannot succeed, it just takes a lot more work.


According to the Record Labels & Companies Guide, the best way to succeed in the indie record label game is to specialize in either local music or genre music. These are two areas that the major record companies may ignore. For example, an independent label called SubPop succeeded by promoting local Seattle punk and grunge music. GoKart Records did the same thing in New York City. Some independent labels specialize in certain musical genres. Alligator Records only releases blues albums, while Moonshine Records specializes in electronic dance music. In this way, independent labels succeed by bringing music to consumers that the major record labels don't release.

The Internet has also done a lot to promote the success of independent record labels. If they have trouble getting retail stores to carry their product, indies can sell albums over the Internet. The Internet has also been host to a variety of contests for music artists wherein the winner receives a record contract with an indie. If you're interested in independent record labels, check out IndieCentre, GarageBand.Com or theCollege Music Journal.

For more information about record labels and the music industry, check out the links on the following page.

Record Label FAQ

How do artists get signed to labels?
Before artists can be signed, they have to be discovered. For example, at a live show. Before the label rep goes to the show, he's given a demo tape by a trusted source and did his research on the band. At the club, he likes what he sees and now must convince the entire record label staff to sign the band. When they are in agreement, the band is signed.
What does a record label do?
Record labels sign, develop, record, promote, publicize and sell music.
What is the difference between independent and major record labels?
Record labels come in all sizes, from small independent labels run by one or two people to huge corporations made up of hundreds of people in dozens of departments.
Can independent record labels be successful?
The best way to succeed in the indie record label game is to specialize in either local music or genre music. These are two areas that the major record companies may ignore.
Where are the major record labels?
For the most part, record label companies are located in New York, Los Angeles or Nashville.
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