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HowRecordLabelsWorkHowStuffWorks

HowRecordLabelsWork
byAllisonKlein
BrowsethearticleHowRecordLabelsWork

IntroductiontoHowRecordLabelsWork
Yourbandisgettinggigs,andyou'vemanagedtorecordathreesongdemoatalocalstudio.You'reeventhinkingabouthiring
someonetomanagetheband.Thesethreestepsareleadinguptoonemassiveleapfindingarecordlabel.It'stheonlyway
youcangetyourmusicREALLYoutthere.
Inthisarticle,we'lltakealookathowrecordlabelsareorganized,whateachdepartmentisresponsiblefor(asin,"whatcan
theydoforyou?"),howradioplaysintothepictureandthedifferencesbetweenthebigguysandtheindies.We'llalsoanswer
.nicofiends.recordingatOsceola
RecordingStudios.

somekeyindustryquestions:Howdorecordlabelsfindtalent?WhatdoesA&Rstandfor,andwhatdothoseguysreallydo?

LaunchVideo
ConnectedLife:DigitalMusic(Part2)

OrganizationofaRecordLabel
Rememberthatnowadays,manyrecordcompaniesarehugecorporationsthatownavariety
ofrecordlabels.Forthemostpart,thesecompaniesarelocatedinNewYork,LosAngelesor
Nashville.Thesecorporationsusuallyconsistofaparentcompanythatownsmorethanone
recordlabel.Forexample,WarnerBrothersRecordsownsRepriseRecordsandMaverick
Records.BMGownsAristaRecords,RCAandJRecords.Intoday'seconomy,mostlarge
recordcompaniesareactuallyhugeconglomeratesthatownavarietyofsubsidiaryrecord
labels.Often,thesubsidiarylabelsareeachminicompaniesoperatingundertheumbrellaof
thelargercorporation.
Todescribethehierarchyofarecordcompany,it'sbesttostartatthetop.TheCEO(chief
executiveofficer)isinchargeofthebusinessofthewholecompany.Inaddition,eachlabel
alsohasitsownpresident.Underthepresidentoftheindividuallabel,therearevice
presidentsinchargeofdifferentdepartments.Let'stakealookatthedepartmentsthatmake
upamajorrecordlabel:
A&RTheA&R(artistsandrepertoire)departmentisoftenconsideredthemostglamorous
departmentatarecordlabel.ThisisbecauseA&Risinchargeofdiscoveringnewtalent.
A&Rpeopleworkveryhandsonwiththeartiststhatthey"sign."(Whenarecordlabel"signs"
anartist,itsimplymeansthattheartistmakesanexclusivecontractwiththatrecordlabel.)
Theydoeverythingfromassistingwithsongselectiontochoosingthepeoplethatwillproduce
thealbumtodecidingwherethealbumwillberecorded.Thepeopleinthisdepartmentworkas

thelinkbetweentherecordingartistandalltheotherdepartmentsoftherecordcompany.
ArtDepartmentThisdepartmentisinchargeofalltheartworkthatgoesalongwithproducinganalbum.ThisincludesCDcoverart,advertisementsanddisplays
atmusicstores.
ArtistDevelopmentThisdepartmentisresponsibleforplanningthecareersoftheartistswhoaresignedtotherecordlabel.Itpromotesandpublicizesthe
artistsoverthecourseoftheircareer.AccordingtoMusicBizAcademy,manylabelsnolongerhaveartistdevelopmentdepartments.Asrecordlabelshavecometo
seeartistsasproductsinrecentyears,someartistdevelopmentdepartmentshavebeenrenamed"ProductDevelopment."Manyinsistthatthisisbecausethe
emphasisinthecurrentmusicbusinessistopromoteartistsveryheavilyinthebeginningoftheircareer,asopposedtolongtermplanning.*Ifyoudon'twanttobea
"onehitwonder,"paycloseattentiontohowtherecordlabelviewsthisaspectofcareerplanning.
BusinessAffairsThisdepartmentdealswiththebusinesssideofthings.Ittakescareofbookkeeping,payrollandgeneralfinances.

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LabelLiaisonThisisusuallyoneperson,orsmallgroupofpeople,whoservesastheliaisonbetweentherecordcompany'sdistributioncompany(eitheran
entirelyseparatedivisionunderthehugecorporateumbrellaoranoutsidecompanyresponsibleforgettingtheCDsintothestores)andtherecordcompany.The
labelliaisonalsohelpsdecidewhentoreleaseanalbum(whenthealbumgoesonsaletothepublic)andmakessureitdoesn'tconflictwithanyoftheotherlabels
therecordcompanyowns.
LegalDepartmentThisdepartmentisresponsibleforallthecontractsthataremadebetweenthecompanyandtheartist,aswellascontractsbetweenthe
recordlabelandothercompanies.Anylegalissuesthatarise(suchaslawsuitsbetweenanartistandthecompany)gothroughthisdepartment.
MARKETING

DepartmentThisdepartmentcreatestheoverall MARKETING

planforeveryalbumthattherecordcompanywillrelease.Ithelpscoordinate

theplansofthepromotion,salesandpublicitydepartments.
NewMediaThisdepartmentisinchargeofdealingwiththeneweraspectsofthemusicbusiness,includingproducingandpromotingmusicvideosfortheartist.
Inaddition,thisdepartmentisoftenresponsibleforhelpinganartistcreateapresenceontheInternet.Itdealswiththenewtechnologiesinwhichartistscanstream
musicandmusicvideosthroughtheInternet.
PromotionDepartmentThisdepartment'smainpurposeistomakesurethatanartistisbeingplayedontheradio.Itmustgetanartist'snewsongsontheradio
inordertoensurethefuturesuccessoftherecordcompany.Thisdepartmentmakessurethatalltheotherdepartmentsarecommunicatingaboutthebestwayto
selltheartisttothepublic.ThepromotiondepartmentmayalsotrytogetvideosplayedonMTVorVH1channels.Thiscanbetheresponsibilityofthisdepartment
orinconjunctionwiththeNewMediadepartment.
PublicityThisgroupisresponsibleforgettingthewordoutaboutaneworestablishedartist.Itarrangesforarticlestobewritteninnewspapersandmagazines.
Theyalsodealwithradioandtelevisioncoverageofanartist.Manyartistsalsohavetheirownindependentpublicistswhohelpcoordinatepublicitywiththis
departmentaswell.
SalesThisdepartmentoverseestheretailaspectoftherecordbusiness.Itworkswiththerecordstorechainsandothermusicstorestogetnewalbumsonto
retailers'shelves.Thesalesdepartmentoftencoordinatestheseeffortswiththepromotionandpublicitydepartments.
Rememberthatanygivenrecordlabelmayhaveaslightlydifferentorganization.Aslargecompaniesbuyupsmallerrecordlabels,theorganizationofrecord
companieschangesagreatdeal.MostrecordcompanieshavetheirownWebsiteswhereyoucanfindwhatlabelsthecompanyownsandwhatartiststhecompany
ispromoting.Formoregeneralinformationonrecordcompanies,checkoutMusicBizAcademyandMusicBusinessSolutions.
WHYSHOPFORALABEL?

Recordcompanies(knownasrecordlabelsbecausealbumshavealabelindicatingwhichcompanyproducedit)takeonalion'sshareoftheworkofthemusic
industry.Theysign,develop,record,promote,publicizeandsellmusic.Ofcourse,allthosethingshappenbeforethealbumevergetsintothestore.
Recordlabelscomeinallsizes,fromsmallindependentlabelsrunbyoneortwopeopletohugecorporationsmadeupofhundredsofpeopleindozensof
departments.Infact,Billboard,thebestknownmusicindustrypublication,listsmorethan2,000recordcompaniescurrentlyinoperation.Musicisbigbusiness.
Successfulrecordssellmillionsofcopiesandearnbillionsofdollarsfortherecordcompanies.

INDUSTRYSTATS
Source:RecordingIndustryAssociationof
America(RIAA)
Approximately27,000newreleaseshitthe
MARKET

Themajorlabelsreleaseabout7,000newCDs.
Lessthan10%ofalbumsareprofitable.
Morethan800millionCDsareshippedto
stores.

TheGatekeepers:A&R
TheA&Rdepartmentofarecordlabelisoftenregardedasthegatekeepersoftherecordcompany.A&R
departmentshaveapowerfulreputationbecausetheyhavetheallimportantjoboffindingandnurturingthe
musicaltalent.Imagineyourimportanceinthemusicindustryifyouweretheonewhofirstdiscovered
MadonnaorAerosmithorBritneySpears.
A&Rstandsfor"artistsandrepertoire,"butmanymusiciansjokethatA&Rstandsfor"attitudeandrejection."
WithoutbeingnoticedordiscoveredbyA&Rpeople,thereisalmostnowayforanartisttogetsignedbya
majorrecordlabel.Intimespast,artistswouldsend"unsolicited"demos(tapesthatwerenotrequestedbythe

recordcompany)toA&Rdepartments,andtheexecutiveswouldlistentothetapesandhopetofindthenextbigthing.Overtime,somanyartistsweresending
demosthatitbecameimpossibleforA&Rpeopletokeepup.Becauseofthisandotherlegalissues,labels,withafewexceptions,soonstoppedlisteningto
unsolicitedmaterial.Becauseitissodifficultfortheaveragemusician'sdemotapetoevenmakeittothedeskofthepowerfulA&Rexecs,manypeopleaskhow
A&Rpeoplegoaboutfindingtalent.
IfyouaskA&Rpeople,theywilltellyouthattheyarealwayscompletelyinundatedwithnewmaterial.Theyoftenbarelyhavetimetolistentothenumerousdemo
tapesgiventothembyfriends,agents,managers,attorneysandotherreliablesources.Withonlyafewpeopleservingasthegatekeepersandthousandsofaspiring
bandsandsingersoutthere,youcanimaginehowdifficultitcanbetobreakintotherecordindustry.
ThebestwaytofindoutaboutwhatkindoftalentA&Rpeoplelookforandhowtheyfinditistotakeasamplingofopinionsfromsomeofthemajorlabelexecutives.
Forinstance,TomDevineofColumbiaRecordshasworkedinthebusinesslongenoughtoknowalotofpeople.Devinelooksfirstatthedemosgiventohimbyhis
mosttrustedbusinesssourcesandworkshiswaydownfromthere.Otherexecutives,likeMaxGousseofEpicRecords,examinethemusicindustryitselftoseeif
thereisavoidinthe MARKET

.Goussemayseekoutacertaintypeofartistthathefeelsisdoingadifferentkindofmusicthanwhatisalreadyinthestores.To

readmoreabouthowA&Rexecutivesfindtalent,checkout"RecordLabel101"ontheRecordLabels&CompaniesGuide.
ItisalsoimportanttorememberthatwhenA&Rexecutivesdiscoverandpromoteaparticularartist,theyareputtingtheirownnameontheline.Iftheartistfails,an
A&Rexecutive'sjobmaybeatstake.Asthispartoftherecordingindustrybecomesclearer,youcanseehowdifficultitisforanaveragebandwithoutrecord
industrycontactsto"makeit."Theotherthingtorememberaboutthisindustry,though,isthatwhilealotbandsgetrejected,somestillmakeitthroughthegatesof
A&R.Whenanartistisdiscoveredbyarecordcompany,thenthefullmachineryoftherecordlabelmustbegintheworkofproducing,promoting, MARKETING

distributingandsellingthealbum.

TheBusinessofMusic
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HowRecordLabelsWorkHowStuffWorks
NowthatyouunderstandhowarecordlabelisorganizedandwhattheA&Rdepartmentdoes,
it'stimetotakeyouthroughthestepsarecordcompanygoesthroughwhenitdecidesto
signanartist.Tounderstandthisprocess,let'stakealookatarockgroupwe'llcall"Band
X,"andarecordlabelwe'llcall"ForExampleRecords."
Beforeartistscanbesigned,theyhavetobediscovered.Imagine,forthisexample,that
BandXisdiscoveredafteranA&RrepresentativefromForExampleRecordsgoestosee
BandXataliveshow.BeforetheA&Rpersonwenttotheshow,hewasgivenademotape
byatrustedsourceanddidhisresearchontheband.Attheclub,helikeswhatheseesand
nowmustconvincetheentireA&Rstafftosigntheband.Whentheyareinagreement,the
bandissignedandthewheelsgointomotion.
BandXmustnowplanitsalbum.TheA&Rdirectorandproducerdecideontheconceptof
thealbumandselectthesongsthatwillbeonthealbum.ForExampleRecordsgivesBand
Xabudget,whichisusedforstudiomusicians,studioengineersandstudiotime.TheA&R
executivethencoordinatesatimeforthebandtobeginrecordingthealbum.(Inthepast,

OsceolaRecordingStudios

recordlabelshadtheirown"inhouse"recordingstudios,buttodaymostrecordlabelsuse
independentrecordingstudios.)

Asthisisgoingon,theotherdepartmentsoftherecordcompanyareinfullswing.Abudgetisallottedforadvertising,art,publicityandpromotion.Asgraphicartists,
designersandcopywritersbegintheirwork,theA&Rdepartment,aswellaspublicity,marketingandsales,decideonareleasedateforthealbum.Theartist
developmentdepartment(alongwithotherdepartments)planstheliveperformances,promotionaltourandradioandTVappearances.Therecordcompanymust
makesurethatthereispromotionforBandXonthenational,regionalandlocallevel(dependingonhowmuch MONEY

thelabeliswillingtospend).

Nearthetimethatthealbumwillbereleased,thelabel'sdepartmentsareworkinghardtosecurepresscoverageandexposurefortheband.Allthemachine'sparts
areworkingtogethertomakesurethatBandX'salbumwillsellmanycopies,ensuringthesuccessofeveryoneinvolved,fromtheartisttotheradiostationstothe
CDstores.
Thisisjustasamplingofsomeofthethingsthathappenwhenarecordlabelsignsanartist.Asyoucantell,themusicbusinessisnotjustpartiesandhangingout
withrockstars.Arecordlabelmustdoagreatdealofworktodiscover,sign,produce,promote,distributeandsellanalbum.
RECOMMENDEDREADING

MusicBusinessHandbookandCareerGuide,byDavidBaskerville
Music,MoneyandSuccess,byJeffreyandToddBrabec
TheBusinessofMusic:TheDefinitiveGuidetotheMusicIndustry,byWilliamKrasilovskyandSidneyShemel
AllYouNeedtoKnowAbouttheMusicBusiness,byDonaldPassman
AMusicBusinessPrimer,byDianeRapaport
WhatThey'llNeverTellYouAbouttheMusicBusiness:TheMyths,theSecrets,theLies(&aFewTruths),byPeterThall

WHYDOCDSCOSTSOMUCH?
AccordingtheRIAA,therearemanyfactorsthatgo
intotheoverallcostofaCD,andtheplasticit's
pressedonisamongtheleastsignificant.But
whileCDmanufacturingcostsmaybelow,ittakes
more MONEY thaneverbeforetoputoutanew
recording.Herearejustsomeofthecoststhatgo
intotheproductionofanalbum:

TheImportanceofRadio
Whilerecordcompaniesrepresentahugepartofthemusicindustry,theotherhugepartconsistsofradio
stations.Recordlabelsandradiostationsmustworktogethertosucceed.Recordlabelsmustgetradiostations
toplaythemusicoftheartiststheyrepresent,andradiostationsneedaconsistentflowofnewmaterialfor
theirlisteners.Whilerecordcompaniesmaketheir MONEY

bysellingalbums,radiostations

Artistroyalties

MAKEMONEY

bybroadcastingadvertisements.Radiostationsneedanaudienceoflistenerssothat

Songwriterroyalties

advertiserswillbuyairtime.Ifrecordlabelscandeliverradiostationsmusicthatwillgetlisteners,stationscan

CostsofrecordingthealbumRecordingstudio
fees,studiomusicians,soundengineers,
producers,etc.

sellairtime.Inthisway,everyonegetswhattheywant.Thereisaprocessthatbothlabelsandradiostations

MARKETING andpromotioncostsVideo
clips,publicrelations,toursupport,marketing
campaigns,promotiontogetthesongsplayedon
theradio,etc.

Whenrecordlabelsareabouttoreleaseanalbum,theyhavetheirpromotionsand/orsalesdepartmenttryto

DesigncostsCDinsert,promotionalmaterials
(posters,storedisplays,musicvideos)

interviewtoofferstationsillegalmoney(calledpayola)toplayanartist'smusic.

Concerttours

gothroughbeforethiscanhappen.

getradioairplayforthealbum.Inthehistoryofthemusicindustry,therehavebeenamillionwaysrecordlabels
havetriedtogettheirartistsonradiostations.Theyhavedoneeverythingfromflyanartisttoastationtodoan

Often,radiostationsandlabelswillworktogethertopromoteartists,likewhenaradiostationhostsaconcert
orinstorerecordsigning.It'simportantforbothrecordlabelexecutivesandradiostationpersonneltobeaware
ofthecurrenttrendsinmusic,keeptrackofanartist'ssuccessandkeepupwithchangingradioformats.Good

relationshipsbetweenarecordlabelandradiostationscanmeanthateveryonewill MAKEMONEY

offofanartist'ssuccess.

MusicMogulsvs.TheIndies
Asitbecamemoreandmoredifficultforbandstogetsignedbythehugerecordlabels,independentrecordlabelsbegantopopup.Independentrecordlabels(also
knownasindiesorgaragelabels)canbeaslargeassomeofthesmallercorporaterecordcompaniesorassmallasoneortwopeople.AccordingtoMusicBiz

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Academy,thereasonthatsofewindependentrecordlabelssucceedisduetothesheeramountof MONEY

,workandtimeittakestorunarecordlabel.

Nowthatyouunderstandtheorganizationofarecordlabel,youcanseehowdifficultitwouldbetohavetotakeonthejobofA&R,artistdevelopment,
MARKETING

,publicityandsaleswithonlyafewpeople.Thelargerrecordcompaniessucceedbecausetheyhavethemoneyandpowertohiremanypeopleto

doallthesejobs.Atanindependentrecordlabel,itmaybethesamepersonwhodiscoverstheartistorband,callstheradiostationsaboutgettingairplayand
arrangestheartist'spublicity.Thatisnottosaythatindependentrecordlabelscannotsucceed,itjusttakesalotmorework.
AccordingtotheRecordLabels&CompaniesGuide,thebestwaytosucceedintheindierecordlabelgameistospecializeineitherlocalmusicorgenremusic.
Thesearetwoareasthatthemajorrecordcompaniesmayignore.Forexample,anindependentlabelcalledSubPopsucceededbypromotinglocalSeattlepunkand
grungemusic.GoKartRecordsdidthesamethinginNewYorkCity.Someindependentlabelsspecializeincertainmusicalgenres.AlligatorRecordsonlyreleases
bluesalbums,whileMoonshineRecordsspecializesinelectronicdancemusic.Inthisway,independentlabelssucceedbybringingmusictoconsumersthatthe
majorrecordlabelsdon'trelease.
TheInternethasalsodonealottopromotethesuccessofindependentrecordlabels.Iftheyhavetroublegettingretailstorestocarrytheirproduct,indiescansell
albumsovertheInternet.TheInternethasalsobeenhosttoavarietyofcontestsformusicartistswhereinthewinnerreceivesarecordcontractwithanindie.If
you'reinterestedinindependentrecordlabels,checkoutIndieCentre,GarageBand.ComortheCollegeMusicJournal.
Formoreinformationaboutrecordlabelsandthemusicindustry,checkoutthelinksonthefollowingpage.

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