A record label is a brand or trademark associated with the marketing of music recordings and music videos. Often, a record label is also a publishing company that manages such brands and trademarks; coordinates the production, manufacture, distribution, marketing, promotion, and enforcement of copyright for sound recordings and music videos; conducts talent scouting and development of new artists ("artists and repertoire" or "A&R"); and maintains contracts with recording artists and their managers. The term "record label" derives from the circular label in the center of a vinyl record which prominently displays the manufacturer's name, along with other information.
Within the music industry, most recording artists have become increasingly reliant upon record labels to broaden their consumer base, market their albums, and be both promoted and heard on MP3, radio, and television, with publicists that assist performers in positive media reports to market their merchandise, and make it available via stores and other media outlets. The Internet has increasingly been a way that some artists avoid costs and gain new audiences, as well as the use of videos in some cases, to sell their products.
Major versus independent record labels
Record labels may be small, localized, and "independent" ("indie"), or they may be part of a large international media group, or somewhere in between. As of 2012 there are only three labels that can be referred to as "major labelsA "sublabel" is a label that is part of a larger record company but trades under a different name.
When a label is strictly a trademark or brand, not a company, then it is usually called an "imprint", a term used for the same concept in publishing. An imprint is sometimes marketed as being a "project", "unit", or "division" of a record label company, even though there is no legal business structure associated with the imprint.
Sony (known as CBS Records until January 1991 then known as Sony Music thereafter)
Universal Music Group
Major labels 1999–2004 (Big Five) Warner Music Group
Universal Music Group (PolyGram absorbed into UMG)
Major labels 2004–2008 (Big Four) Universal Music Group
Sony BMG (Sony and BMG joint-venture)
Warner Music Group
Major labels 2008–2012 (Big Four) Universal Music Group
Sony Music Entertainment (BMG absorbed into Sony)
Warner Music Group
Major labels since 2012 (Big Three) Universal Music Group (part of EMI's recorded music division absorbed into UMG)
Sony Music Entertainment (EMI Music Publishing absorbed into Sony/ATV Music Publishing)
Warner Music Group (EMI's Parlophone and EMI/Virgin Classics labels absorbed into WMG on 1 July 2013)
Record labels are often under the control of a corporate umbrella organization called a "music group". A music group is typically owned by an international conglomerate "holding company", which often has non-music divisions as well. A music group controls and consists of music publishing companies, record (sound recording) manufacturers, record distributors, and record labels. As of 2007, the "big four" music groups control about 70% of the world music market, and about 80% of the United States music market.Record companies (manufacturers, distributors, and labels) may also comprise a "record group" which is, in turn, controlled by a music group. The constituent companies in a music group or record group are sometimes marketed as being "divisions" of the group.
Record companies and music publishers that are not under the control of the big three are generally considered to be independent (indie), even if they are large corporations with complex structures. The term indie label is sometimes used to refer to only those independent labels that adhere to independent criteria of corporate structure and size, and some consider an indie label to be almost any label that releases non-mainstream music, regardless of its corporate structure.
Independent labels are often considered more artist-friendly. Though they may have less financial clout, indie labels typically offer larger artist royalty with 50% profit-share agreement, aka 50-50 deal, not uncommon.
Music collectors often use the term sublabel to refer to either an imprint or a subordinate label company (such as those within a group). For example Universal Music Group own or has a joint share in a number of other record labels such as Island Records – a sublabel of Island Records is 4th & B'way Records which specialises in Hip Hop music.
Avanity labelis an informal name given sometimes to arecord labelfounded as a wholly or partially owned subsidiary of another, larger and better established (at least at the time of the vanity label's founding) record label, where the subsidiary label is (at least nominally) controlled by a successful recording artist, designed to allow this artist to release music by other artists they admire.
The parent label handles the production and distribution and funding of the vanity label, but the album is usually released with the vanity label brand name prominent. Usually, the artist/head of the vanity label is signed to the parent label, and this artist's own recordings will be released under the vanity label's brand name.
Creating a vanity label can be an attractive idea for the parent label primarily as a "perk" to keep a successful artist happy and a venue to bring fellow artists to the public's attention.