Why sign with a label?
Weighing the value against independent release strategies in today’s music landscape.
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Let’s dive into today’s topic:
Why sign with a label?
The days when artists needed a label to build sustainable music careers are long gone, but signing with a label still holds many advantages.
Why it matters
Labels were once essential for distributing music through physical formats like CDs and vinyl. Today, artists can publish music through aggregators directly to DSPs, such as Spotify, without third-party involvement.
In fact, labels struggle to keep pace with industry growth, as DSP revenue grows three times faster than label revenue.
Despite this shift, many artists still pursue label deals, pitching their unreleased music to A&Rs in hopes of securing a contract.
Understanding what labels offer helps artists decide whether pursuing a deal aligns with their career objectives and creative vision.
How it works
Labels offer many advantages that artists should consider when evaluating potential deals:
Brand spillover effect - The label's brand influences the artist's brand when releasing music under that label. Artists should evaluate whether the label brand creates a desired association for them.
Fanbase growth - Established labels have built their own fanbases through social media content and reputation. Artists can benefit by getting featured on the labels’ social media channels, newsletters, and compilations.
Feedback from experienced A&Rs helps artists refine their creative process and may connect them with top songwriters, producers, and fellow artists for collaborations.
Industry credibility, validation, and relationships - Labels may open doors more easily, for example, through established access to editorial playlist programmers at radio stations or DSPs.
Labels provide upfront funding for marketing campaigns, content creation, PR, and promotion that independent artists might struggle to finance alone.
Larger long-term advances may provide financial security during creative periods, allowing artists to focus on their craft rather than revenue generation.
One-stop shop - Instead of managing multiple freelancers or handling all aspects single-handedly, a label can function as a team of specialists.
Yes, but..
While labels offer value, not all of them provide benefits that justify their proposed deal terms. Many artists have successfully built careers without traditional label backing. The percentage of revenue artists sign away should correspond to the actual value the label delivers.
Take action now
Unsigned artists can compile a bullet-point wishlist of skills they wish to outsource and identify knowledge gaps in their current team. They can also estimate the approximate value of services a label would offer compared to the percentage of rights they would surrender.
Your thoughts
Further reading
Artists shouldn’t rush releasing music to streaming platforms (The Fanbase Builder)
Market value is the music industry’s hidden currency (The Fanbase Builder)
Why artists shouldn’t skip steps (The Fanbase Builder)
People discover music through social media (The Fanbase Builder)