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Are Record Labels Needed No More?

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Every now and then, artists emerge into stardom without the help of record labels, becoming revered among the many unsigned and their advice highly sought after.

Russ in particular, the Italian American producer, rapper, and singer who blew up having posted music on his SoundCloud every week for two years is famous for “exposing” record labels and their shams every opportunity he gets. But with his found fame why did he still go on with a deal with Columbia?

You see, before the new dawn where anyone could create and upload music from his bedroom by the click of a button making it available across all streaming platforms, releasing music was a chore. A chore because not only was it expensive to own a studio back in the days, it was costly to get music pressed to vinyl and distributed across the globe into brick and mortar stores for the masses to buy. It took a lot of resources and a network of companies to market, advertise, radio promote, and make a record available in bulk at every corner of the world. Record labels had the capabilities to do so and would take being rich or heavily funded by a third party for a band or solo artist to emulate.

So while some took to playing live shows and performing to a few, others signed deals with labels so they could reach more. They signed at a royalty rate, that when money is being made from their music, they’ll be paid a percentage of the earnings. It was a partnership. You bring the music, they bring the resources. You together make the money and split. But because it took their resources to get you wherever you arrive, they’re entitled to a greater share in the profits. So the splits were usually an 85/15 deal in favour of the labels. But before the royalty computations, an artist upon signing a deal given an advance(an upfront fee), must pay it back. This has been standard practice in the business.

What most artists failed to realize was that the bigger the advance, the longer sales from their music would be used in paying back what they owe. Unlike other artists, T-Pain was smart enough to have accepted a 20,000 dollar upfront fee when he signed to Akon.

Record Labels
Record Labels

In a Twitch stream, he revealed how Interscope offered him a 900,000 dollar signing bonus to which he declined. He goes on to say he has since made back the money for Akon and owes him nothing.

Aside being indebted to labels, artists “blindly” give away rights to their music. This so often happens to new artists who at the sight of the “goodies” a label has to offer ignore the scrutiny of the contracts being offered proceeding to ink their agreement to the deal. They end up never owning their masters, the real source of income the moment their tenure at a label ends.

It is evident labels use the promise of making one a star in luring unsigned artists into accepting their terms, but a few happenings have shown how one can use leverage and knowledgeability in negotiating a better deal in favour of oneself. Take Russ for example, he’s been able to partner with Columbia on a 50/50 split deal so he could be marketed with their resources.

He pulled it off because he’s been selling shows, making sales off his music and merch before their approach. So in reality Columbia needed him to make money.

They went into business without him having to lose the rights to his masters.

Another smart move was from Tory Lanez who by an Instagram post in May 2020 celebrated his departure from Interscope Records saying, “I waited and calculated for 4 years… TO BE MY OWN BOSS … I OWN all my masters/publishing/royalties, etc … This may not mean anything to y’all, BUT SEEING MY RECORD LABEL AT THE BOTTOM UNATTACHED to a Major label is what we have worked this hard for …#TemperatureRising ON EVERY MAJOR PLATFORM OUT NOW!!!”. You can see he knew and understood well the deal he was in.

Russ, famous before Columbia came through, still went ahead with the Columbia deal for one reason, to reach more people. It is undeniable the exposure Columbia gave him with their resources. His numbers on streaming platforms have been on the rise since. His old records are being visited time and time again.

Tory, aware of the power of distribution, built contacts while under Interscope and on his departure new labels showed interest to which he said, “I’m honored about the amount of interest, but I feel that with my current team and our ability to create and distribute content, we’re going to be able to establish a viable and profitable label of our own,”

These two are a proof that audience reach above all else is important to the success of an artist. If there be things nobody could do better than labels, it is their ability to secure radio spins, live television appearances, streaming service playlisting among many other marketing and promotion services; the soul of breaking an artist and his music.

So while Russ has always discouraged the idea of giving away a percentage of one’s rights to the music for distribution purposes, let none forget labels with their connections have the power to propel one’s career. Their percentage cut is just their pay for their services.

Labels would be dubious in their dealings, it is to an artist’s advantage to be knowledgeable.

The same internet that distributes music at a click is a mine for information on the music business. One should understand the basics of the music business, knowing what copyright is, what a master is, what royalties are, what publishing is. Also, artists are advised to get lawyers when signing deals because inside legal languages are contractual terms only lawyers can see and interpret.

To be at an advantage like Russ, one must be able to build a following. It is only there and then an artiste can decide the terms of a recording agreement like he did.

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