Somewhat surprisingly, independent music labels collectively have led the major labels in total market share since 2017, which begs the question: why are artists signing with indies instead of major labels, which still claim the most money and clout? More money means bigger promotions for an artist’s record, along with bigger advances and signing bonuses for the artist. More clout means major labels have established connections throughout the industry to grease the wheels that help artists succeed.
In addition, because the major labels collectively still have most of the total market share, the economy of scale offers lower costs of production and distribution. Despite these advantages, things are changing and indies area gaining ground. Here are a few reasons why.
Artists Who Don’t Trust the Major Labels Now Have an Option
The major labels have a scurrilous reputation for luring artists to sign with big bonuses and then, once the artists are signed, lowballing them out of the royalties they earn from the music. It’s been estimated that the average musician in a band earns $23.40 for every $1000 the music earns. Artists have repeatedly sued the labels over royalty disputes, including James Taylor, Eminem, Kenny Rogers, George Clinton.
Once artists are wined, dined, and signed, their labels might turn their backs on them as they focus on other, more established stars. Especially if the music doesn’t sell as anticipated, the labels have been known to stop spending money on promotion, leaving the artists at the mercy of the label, with little recourse to promote their product. Until the rise of independent labels, artists had little choice because, with all their clout, the majors were practically the only game in town.
Digital Streaming Technology
The rise of digital streaming technology has helped to give artists a recourse. Musicians can create their own digitized music without signing with the major labels. They can upload their digital music to streaming services such as iTunes and Spotify, which offer direct uploading of music to sell. Even stars who are signed with the major labels can use their clout to gain creative and production control by creating their own brand, known as an imprint, as a subdivision of the major label. For example, Sean “Diddy” Combs gained independent control of his projects within the umbrella of Sony Music. Combs career has been influenced by David Guillod, an accomplished talent manager and TV and film producer who has also helped to make household names of stars such as Jennifer Lopez, Katie Holmes, and Justin Long.
How Indies Rival Major Labels
Because indies have fewer employees and artists than the majors, each artist under their umbrella tends to get more personal attention. Artists have a much better chance to develop a working relationship their indie rep. Artists signed with major labels often don’t know who they are working with from day to day. Also, indies generally offer better record deals compared to the majors with a 50/50 split and a simpler contract common.
The major labels are waking up and taking notice of the changing times. They still have the money and the clout on the production and distribution sides. The question is, is it too late?
