The term “record label” can be difficult to define because it can refer to a variety of things. Furthermore, the term “record label” must be considered obsolete, as most recording artists no longer make records. They record their music on CDs or make recordings that can be downloaded. When records were the primary means of listening to music or hearing it played on the radio, the term record label made more sense, and it referred to the label pasted on the center of the record that identified the company that produced the record, the artists, and the title of the particular record.
When records were first made, they were frequently made by small, independent businesses, each with its own name. The label usually referred to a contractual relationship between certain artists and a company, and each company represented a specific “brand” or trademark. “Labels” worked hard to get airplay for their contracted artists, which could lead to people buying records. Labels made money, and artists made money on occasion, but they were often paid a flat fee for their recordings.
There are still small independent companies that work with either one artist and are created by the artist, or with a small number of artists. Because they lack the presence and advertising budget of major music production companies, independent labels frequently face difficulties in terms of music promotion and distribution. This is changing with the ability for any band to record their own music or videos and distribute them for free or for a small fee on the Internet. Because of this ability, band or artist self-promotion is reviving in some cases. Without the help of a major recording studio, bands like OK Go have become internationally famous.
Typically, a record label refers to a particular recording studio’s brand. Warner Music Group, EMI, and Sony are just a few of the major studios. Around 70% of all record labels are controlled by these studios and a few others. Small subdivided studios in each of these large studios may work with specific types of artists. These are sometimes referred to as sublabels.
Sublabels are useful for larger studios, but the larger studio itself is still responsible for promoting and advertising any record labels it owns. Larger studios will occasionally buy an independent label that is constantly producing great records or finding hit performers. Occasionally, a larger recording company will enter into a contract with an independent label to assist in distribution and production in exchange for a portion of the profit.
For example, the Warner Music Group has about 50 record labels that are either wholly owned by the company or have a contractual relationship with it. The amount of control Warner has over a single label is largely determined by the terms of the contract. Each record label may have its own distinct brand or type of music to record.