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THE MUSIC BUSINESS Series. (Part III): To take the Independent lane, go Indie or to Sign to A Record Label. Here are your options

One of the exciting ventures to ever happen to every artist’s career, besides the accolades, and having a hit song is signing a recording deal with a major record label. Meaning that many musicians place scoring a major label record deal at the tops of their to-do lists. Having one of the large labels working on behalf of your music can be your ticket to the big time.

The thing is when people think about “signing to a label” they envision the successful artists. They assume that they’ll be Kendrick Lamar, or any other mainstream artists overnight. However, there are downsides to signing with a major label more so when it comes to the legitimacy of these musical empires, and having the musician’s interests at heart. For a country like mine for example, we do have less than five well established and record labels. The main stand outs being Swangz Avenue, Talent Africa, Dueces Entertainment Group, Black Market Records, TNS, Mpaka Records, Black Magic Records and indie label Bantu Vibes/ a sub division of Trendsetters Music Africa, among others. On the international scene are labels: Konvict, Sony Music, Universal and Warner Music.

Why Do People Still Sign to Major Labels, Again? | by mauludSADIQ | The  Brothers | Medium
                      the three major record labels worldwide
Swangz Avenue closed!
Swangz Avenue, by far the most well established one there is, back home

Whereas artists are sometimes approached directly by these music establishments or through agents, the choice to record and publish music as an independent act, or to sign with a major recording label is always up to the artist and what their priorities are. Because of lack of guidance or clear knowledge about how these contracts work, some may act too quick into accepting whatever is being offered on the table, and sometimes falling victims to toxic agreements, and working conditions, so as to hit the label’s targets that they’ve singed to.

So, today, in this episode about ‘The Music Business’ I’ll be talking about the question “Should artists pursue a major record label deal if they’re offered one?” In this chapter, we’ll be going over the pros and cons to getting signed by a major record label, and the possible alternatives in case an artist does not concur with the idea of getting signed. Some people might wonder why is this even a question? But those people would be surprised to find out that opting out of a record deal is the best decision for their career.

Why? In a nutshell, it all comes down to goals.

Well, what do I mean by that? Let’s say you’re an artist that’s already established your style as a musician and released an album or hit single even. You paid someone to professionally produce it, but you had creative control over the sound and songwriting. You start gaining substantial momentum (building up a very considerable fanbase that connects with you well on your own in years) and are a promising artist, and record labels are beginning to notice you. One catches your eye because it’s a major. However, in their contracts, they might say they obtain ownership over your style and essentially have creative authority over your music. The upside is that they’ll partner with you and somewhat back you financially. However, you’re on a short leash all around. Well, here’s the good, the bad and the ugly about signing with a major record label:

The Pros/ Upsides:

For an artist whose goals are to remain faithful to their style and creativity, they may not opt for a major record label at all. Depending on how much leverage you have, like the size of your fanbase and album sales, you may be able to negotiate. Most of the time, this isn’t the case.

But for the artist that has more leeway in terms of creative flexibility, signing with a major record label offers a bit more financial flexibility, especially in the marketing front. Plus, you have a team of business savvy folks from the industry to potentially connect with and back you. Just keep in mind that record deals are not artist-friendly and you’re entering a way more competitive space than your niche music. So, while you do get more help, there’s still a substantial amount of challenges your way. Now, to the pros and cons to getting signed by a major record label.

Availability of resources, budgets, and excessive Amounts of Funds: Established record labels have far greater amounts of funds at their disposal than indie record labels do. This extra money means that the major labels will be able to provide financial backing and support for mastering, distribution, album artwork creation, marketing/ advertising, merchandise, touring, high-quality production, packaging, global physical distribution as well as digital distribution through the major online outlets, music video shoots, and other expenses. However, the budget and resources available depend on the label.

Implemented marketing strategy: In addition, a label will have music industry experience. Signing with a record label with a robust marketing strategy will increase your music sales, help you reach new fans, and boost your music career. Also, a label may have a large email list, regularly send newsletters, have a strong social media presence, music media support, and more.

Contract - Wikipedia

You’ll be able to rub shoulders with other industry professionals to help you along the way. Growing this connection base would otherwise take longer, but with a major record label, you can connect with producers, songwriters, marketing gurus, tour managers and more. All of these folks are essential to your learning and growth.

Existing network and connections: One significant benefit of signing with a label is their existing network. This can present major opportunities for you and your music, as most record labels have well-established influence and connections in the music industry. They have a larger fanbase, are better positioned to secure licensing and publishing deals, bookings, music venues, PR companies, shows at larger venues and festivals, media coverage, radio plays, live interviews and other music industry professionals and opportunities.

Along with connections, you can focus on just growing your vocal gift and songwriting abilities. Being able to delegate the heavy lifting of marketing and the technicalities of engineering a song is HUGE. Not only are you able to save time, but you’ll also be able to concentrate your efforts on what you love most.

Even as technological innovations reshape the way people listen to music and purchase music, major labels still have a financial advantage over just about every indie label. Because they have higher revenue than smaller labels, they have more cash on hand to spend on promoting your music — which is exactly what you want. It also means they may be able to offer you a large advance and invest in better facilities and equipment for recording, touring, video shoots, and other opportunities.

Major labels may bench mark on their existing connections, and influence to  get favorable deals with local media outlets. For example, access to a proven act might be dependent on also giving airtime or space in print to an up-and-coming act. This is beneficial for you if you are the up-and-coming act.

However, the cons to having a major record label are:

You usually forfeit some part of your creative control. Major record labels are super savvy when it comes to crafting a specific persona to meet a large niche. And depending on how your music is delegated within the system (i.e. the person that signs you won’t necessarily be the person that manages you), you may not even get a say in terms of what your music sounds like or even if it gets released.

A lot of major labels sign multiple musicians and publish a lot of music just to see what will stick. As a new signing, except in very special circumstances, you’re likely to find yourself fighting for attention. If your music doesn’t start selling, you can find yourself with a record out that isn’t getting much promotion and a label whose representatives don’t return your phone calls.

Staff turnover at major labels can be high, and you may wake up one day to find out that the person who loved your music is no longer working at the label. If the new person is not a big fan of your music, your album is less likely to be a priority and might get forgotten about altogether. Just keep in mind that not all artists that are signed actually even get a record out. So, even if you’re signed, you still haven’t “made it” until you actually released a successful album. Contrary to popular belief, major labels do sign many artists, but much of what is signed quickly gets turned over and dropped by the label. About 99.8% of folks signed are let go from a record deal. According to distractify.com, an entertainment and music website, among the thousands of artists signed to music labels, only 99 per cent get to release their first album and 0.2 per cent only survive being dropped before releasing their first album. For instance, some will spend months working on albums but the release gets extended for years and eventually cancelled altogether and later getting dropped. Although many recording contracts indicate that artists will release this or that number of albums, some artists do not get to release anything for even five years — it is not even guaranteed overnight world stardom.

A key man clause gives you an out if the point person you were working with at the record label ceases to be involved, but such bargaining power is against you when you sign a major label deal.

Many dedicated music lovers work on the major label side of the music industry. However, not everyone who works at major labels love music. You’ll find a higher concentration of people who are in the business strictly for the money in major labels than you will at indie labels, and that sometimes ends up rubbing musicians the wrong way.

Must Fight for Attention: major labels do sign many artists, but much of what is signed quickly gets turned over. If your music doesn’t get taken in by an audience immediately, you may find yourself having a hard time getting any attention from the label. If this happens, you may find yourself spending more time in a battle for attention than working to further your career; as most labels always focus on their biggest artists that Will bring in the most cash.

A Lack of Creative control and royalties: Being that major label record companies are a business, they will likely do everything they can do profit as greatly as possibly from their investment in you, your music and your brand. Not only does this mean the possibilities of small royalties, but it means the artist does not get to keep the rights or even the creative control over the music.

Artist Unfriendly Deals: Being that major label record companies are a business, they likely do everything they can do profit as greatly as possibly from their investment in you, your music and your brand. Not only does this mean the possibilities of small royalties, but it means the artist does not get to keep the rights or even the creative control over their music.

As I mentioned earlier, most deals aren’t artist friendly, specifically around the areas of recoupment, contract lengths, if you can; dip into your other streams of revenue like securing brand endorsements, sell merchandise, etc. Unless you have leverage and/or an excellent lawyer, these things are really challenging to negotiate.

Limited creative control: Signing with a record label gives them control over your music. The label can make deals and decisions with your music without your approval. They also have full control over distribution, marketing, artwork, messaging, and more. However, the control over your music and brand depends on the terms set in the contract.

Fewer profits: Records labels take a percentage of the profits generated from music sales, streams, licensing deals, and other revenue sources. Also, some labels use the royalties generated from music sales to pay for mastering, promotional mailers, and other expenses associated with the release.

Transfer of copyright ownership: The record label owns the master rights to your music when you sign a deal. They have the freedom to negotiate music licensing and publishing deals without your approval. As a result, they can keep more profits generated from these deals.

Case in points/ Examples:
As an artist that is signed, labels invest a lot in the artists and hope to make through music sales, therefore label owners may want to package them in a way they believe will work for the market in which they intend to sell you. This as a result, means that scheduling music, studio time or releases, is different. They will not want you to work with producers or even collaborate with artists they may not approve of and one cannot release a single or an album, in fact, they have the power to release the artist’s music. remember the days when Keko worked with Sony Music, her first release ‘Let Me Go came’ in handy, maintaining parts of her, but introducing her to electronic. But that was not all. The releases were inconsistent and veering further from what people had fallen in love with. Songs such as ‘See Ya, Fly Solo’ or ‘Naughty’ did not even come close to what ‘Make You Dance’ or ‘How We Do It’ had got without a Sony deal. Three-and-a-half years down the road, Ugandans forgot Keko existed, and blamed Keko’s unprecedented stunted career had a lot to do with her Sony deal. They argue that the plan to change a rapper into a singer, especially an electronic music one, drove her away from the crowd that had appreciated her Afro-fusion rap style.

There are stories written accusing big labels of murdering a career. Nigeria’s Davido that is signed under Sony Music; like many of the artists they sign, had lost his creative freedom, fixed with a producer and almost ended up making collaborations with other Sony cosigns even when he did not necessarily need them. In the same way, Wizkid signed to Sony in 2016. Then an African mega artiste, he went on to work on a project that featured other label cosigns such as Major Lazer, Trey Songz, Drake and Chris Brown. The project ‘Sounds from the Other Side’ like Davido’s ‘Son of Mercy’ LP, failed both globally and in Africa, a thing that saw the two artists’ careers take a dip. Davido is still signed to Sony but had his contact revisited and amended, thus regaining the creative freedom that saw him rejuvenated with 2017 singles such as If, Fall and Fia. On the other hand, Wikzid and Tekno who signed with international labels but have wanted out in vain since they signed contracts they cannot buy out.

For the case of here, some labels always assume ownership of an artist’s social media handles and presence, meaning a fall out could guarantee a loss of these, to the label. Recall the John Blaq breakout with Black Magic Records where he lost his socials, and YouTube channel to the former management. Another example would be Irene Ntale’s scenario of 2017.

Bad contract deals: Many independent record labels have artist-friendly contracts. However, major record labels are known to have contract deals that give the artist a lesser percentage of royalties. Also, signing with a label means you have to deal with these complicated contracts and expensive layers if needed.

So, on this note; allow me explore you through the various types of music contracts there is:

Labels have different kinds of contracts for different artists. If you determine that a label, either an indie or a major, is the right path for you, there are several types of deals that you can sign. Here’s a breakdown of 4 of the most commonly seen:

1. Production Deals. Rather than signing to the label, with a Production Deal you would sign on to work with a specific producer who has an agreement to develop artists within a label. Think of this as an artist development deal. You gain the benefit of working one-on-one with the producer, but you also take a big % cut, as it’s possible with these deals for the producer to take up to 50% of the royalties.

All contracts are agreements but all agreements are not contracts- iPleaders

2. Distribution Deals. This type of deal is simple. You are often expected to create and produce your album from start to finish, and then the label helps you to get the product into stores. This deal could include getting music videos, albums, and singles onto the label’s own major digital channels. Most often, this deal includes no advance (payment given up front, used for recording purposes, which is paid back by the artist through album sales). they therefore work on commission and could take up to 25% of the money generated. One such artist who has had such arrangements here is “Lydia Jazmine who once signed a distribution contract with Universal Music, which was never publicized because they do not own her.

3. Major Label ‘Standard’ Record Deal. Formerly the most common type of deal, this is what most musicians think of when getting ‘signed by a major’. In this deal, the label would be part of the artist development, recording, pressing, distribution, and marketing. And in most cases, the label would pay the artist an advance. Once the advance is paid off, artists commonly receive a royalty rate of up to 15% of revenue generated. Vinka went into this hefty type of arrangement with Sony Music, meaning they’d be in charge of her music production; they tell her when to release a song and if a song is not approved by them, it can never be released. Swangz still continues management duties for Vinka, however as revealed by Kyazze last year at the event where the ‘Sure’ singer signed with the label Sony Music, Sony now has control of the music that Vinka released with effect from the time of signing, and music release schedules for the artist had adjustments made to them. Swangz Avenue boss Benon Mugumbya, in an interview, however, made cleared the air about what the deal meant to their artist. He said; besides a number of singles, the artist was scheduled to release every month until December, much of Vinka’s business will change — she will not be releasing music frequently.

4. The 360 Deal. Seen by many as the future of label deals, this is a new(er) type of deal offered by labels. With a 360 deal, the label gets involved in all (or most) aspects of the artist development, including touring and brand development, in exchange for taking a % of all revenues generated across all channels, not just recorded music. The benefit here is that you have the label’s network and influence to help you generate further revenue opportunities. The downside is the label can dictate all aspects of your career and will take a cut of even more of the money you make.

Another avenue for consideration, would be belonging to an INDEPENDENT “INDIE” MUSIC RECORD LABEL;

An Indie music label is a record label that operate without funding of major record labels. They are kind of Small medium seized enterprises (SMEs); usually are represented by regional or country associates they have in each country. Indie do not vary much from major record labels. They typically sign an artist Because They ACTUALLY Love Their Music, believe in the Music and the Brand: Indie music labels are smaller companies who are not pressured by a board of directors to sign a specific sound or promote a specific look just for success on the charts. Typically, when you are sign a contract with an indie label, they trust that your brand will sell, and work to promote you, not an image that they create for you.

Macklemore, Tyler the Creator, are some of the most selling indie artists.

Pros:

A Team that Believes in Your Music: Indie music labels are smaller companies who are less likely to be pressured by a board of directors to sign a specific sound, or promote a specific look just for success on the charts.

Close Personal Relationships with Your Team: Independent record labels tend to have much smaller artist rosters than the larger major record labels. This allows an artist to get the attention he/she needs, more face-time with their team to discuss things like strategy and execution.

Pro-Artist Contracts: Although some of the bigger indie labels use contracts that are close to those of the major record labels, they are usually less complex. The indie label contracts are known to be more artist-friendly, giving the artist more money for their work through either profit-sharing programs or simply a larger royalty percentage than given by the major labels.

Artists Get the Rights to Their Music: This is a vast benefit of signing a contract with an indie label. By being allowed to keep the rights to the music, artists have the option to do what they would like once the song has been recorded. With the growth in exposure of independent artists, opportunities of a hit single being reused for commercial use (movie, TV and video game soundtracks) is increasing.

Cons:

Funding: An issue for independent labels, being that they can range so greatly in size and success, is funds. A lack of funding means a smaller budget for recording, production of physical disks, packaging, distribution costs, tour support, merchandise, etc.

Size: Although a smaller size allows artists to form stronger relationships with an indie record label, it also means that the label itself has less influence and reach within the industry.

Lack of Funds: This is a common problem for independent labels, being that they do range so greatly in size and success is funds. A lack of funding means a smaller budget for recording, production of packaging and distribution costs. Not to mention, tour support, merchandise and etc.

Digital music distribution, streaming platforms, social media, online marketing tools, and technology advancements are changing the way artists release music and reach fans. Online music services offered to independent musicians: The digital era brings a variety of music services and tools for independent artists. Musicians have access to music distribution, marketing, streaming, merchandise creation, and other services. The internet also makes it easy for musicians to reach new audiences. They can now deliver their music to digital music stores, music platforms, and streaming services without a record deal. There are more independent artists than ever before breaking into the mainstream without the support of a label. In other words, the other option to making it in the industry would be ‘going INDEPENDENT, i.e. releasing music as an independent artist, although you’d lose access to better producers. (provided that you aren’t one yourself, of course.). Chance the Rapper is an excellent example of an independent artist who seen major success without signing with a record label; having seen his 2016 mixtape, ‘Coloring Book’ earned him 3 Grammy Awards, including the award for Best Rap Album; making it the first streaming-only album to win a Grammy Award.

Releasing music as an independent artist has the following advantages & downsides:

100% creative control: Independent artists have complete control over the direction of their music. They also have full control over distribution, marketing, artwork, and more. Moreover, an independent artist has free will to make decisions about their creative vision and to say yes or no to any opportunities that come their way. Simply put, this is the most ideal scenario possible for an artist.

Keep 100% of the profits: Independent artists keep 100% of the profits generated from music sales, streams, licensing deals, merchandise, and other revenue sources.

100% Retention of the Rights/ ownership of your music: Without a label, any revenue generated from things like album sales and sync licensing deals goes right into your pocket. Independent artists own the master rights to their music. They also have the freedom to negotiate music licensing and publishing deals. Moreover, they don’t have to worry about confusing contracts, expensive lawyers, and signing over their music rights.

Build Your Own Team: While DIY means Do It Yourself, it doesn’t mean do it alone. You are your own boss, so you can surround yourself with the people who share in your vision and have the skills to help you to move your career forward.

Going DIY (Do It Yourself)/ INDEPENEDENT/ Starting your own label:

Artists who want to retain the master rights, keep 100% of the profits, have complete creative control, and are music business savvy may consider going independent. Some of the most successful talents we have here is Ykee Benda, A Pass, Eddy Kenzo (Big Talent Entertainment) among others.

Forming your own label is no easy task, and most musicians are probably better off looking to team up with an already established one to help bring their music to listeners. If you’re considering starting your own label, here’s a few pros and cons to consider:

Pros:

Creative and financial freedom. The biggest advantage of releasing music under your own label is that you don’t have to answer to anyone. Everything from the sort of music your label chooses to release to marketing tactics to financial details are 100% within the sphere of your control. In addition to being able to release any kind of music you want; you’ll also be able to have a complete say in what happens with your finances.

If you’re considering starting your own label, a good question to ask is what the difference will be from simply self-releasing your music. Sure, you can call yourself a label, but what does that really mean? Do you have money saved up to invest your releases? How about close connections with booking agents and press and media contacts? Forming a label doesn’t mean that the world will start taking your music more seriously. The music industry isn’t naive and simply calling yourself a label won’t give you or your music legitimacy. If you’re thinking about releasing music through your own label, first figure out what your goals and resources are. To make it worth it, you’ll need a plan.

Pro: Forming a label helps musicians get familiar with the business side of music

Most musicians never stop to think about what things look like from a business perspective when it comes to their music. Things like profit margins, market demographics, and royalty payments become major considerations when you’re running your own label, and these are things every musician should be thinking about. Creativity and artistic expression should be the main driving forces behind the work of any musician, but not having a solid grasp on the business behind music can be detrimental for artists. Starting a label forces a musician to get familiar with the financial particulars of the industry.

Cons: Running a label is a ton of non-musical work

If you love making music, then forming and running your own label is going to be a huge amount of work that will probably distract from your work. Whether it’s booking shows or promoting a release on social media, most artists have to do some non-musical work from time to time, but these sorts of tasks increase exponentially when you’ve got your own label. For musicians who hate this sort of work and aren’t particularly business savvy, starting a label isn’t going to be worth their time.

New independent labels often lack vital resources and connections and therefore suffer for limited resources and budgets to fund mastering, distribution, marketing, merchandise, touring, and other expenses are expensive. Many independent artists don’t have the resources and money a record label can provide.

Limited network: One of the biggest benefits to a label is the access to their existing network which can open significant doors and create opportunities for you and your music. Without a label, you have a limited network of fans, industry contacts, a larger fanbase and connections with music industry professionals such as promoters, booking agents, media, etc. Your network is therefore limited to those who you know directly.

Limited music business experience: Learning the ropes of the music business is challenging. It takes time and experience to learn all aspects of the music business. There are a lot of parts to manage, changing trends, music laws, and much more. It’s a complex world! It can also be an expensive lesson to figure out what works and what doesn’t.

Limited time: Pursuing the independent artist route is time-consuming. Self-releasing your music can seem like a full-time job. It requires a lot of time to set up distribution, create all the release assets, develop a marketing strategy, track sales, book shows, and everything else associated with releasing music. All this extra work also takes away valuable studio time.

Limited Resources: No label means any money for things like recording, distribution, marketing, etc. all come from your pocket.

So, this boils down to whether artists need these labels?
With the exception of some artists whose careers have been propelled to greater heights, and giving the artiste a chance on the bigger market. For the most parts of what we have read, heard and seen, it is always recommended an artist goes independent.

CONCLUSION

Which Path Will You Take? 🤔🌚

Now that you understand the different paths you can take as a musician, it’s time to weigh the pros and cons and decide which one makes the most sense for you. There is no right answer, it all just depends on where you feel you could use the help and how you can see yourself moving forward most comfortably and effectively in the future. Artists who want more freedom to work on music, don’t mind fewer profits, and want more exposure may consider signing with a record label; and get publicity a lot easier and helps advertise yourself as an artist, and also get lots of useful feedback and have easier access to working with well-known producers, song writers and artists. The best option in my opinion is to be on a label until you are big enough to do your own thang or even start a label yourself. The closest example I could lend you is Ykee Benda, Nessim, and Bagonza Alexander(A Pass) who were formally on Badi Music, but each later went on to start their own thing; with Nessim opening up his own studio and label (Shotgun Records), Ykee (Mpaka) and A Pass (I am A Pass Records/ Game Over).

On the other hand, you lose lots of freedom. You have to release singles/albums when your label wants you to and are required to go on tours and feature on other people’s work. You will have restrictions to what you can or can’t say and will probably have to stay within boundaries with how revolutionary or game-changing your work can be. That being said, would you rather be on a label or independent?

Remember that the only one responsible for your success is you. There is heaps of information out there to help you succeed. Take time to learn what works best for your music and brand. Good luck! 🙂

As an artist, Focus on 2 things and 2 things only. 1. Making Great Music! 2. Pushing That Music. Those are the only 2 things that you should worry about while trying to make a name for yourself. You can do this by creating your own website where you can upload your songs and make cash through downloads. All you have to do is work tirelessly promoting your website. And that’s it for today’s episode! I hope you guys enjoyed hearing the pros and cons to getting signed by a major record label, and your other available options.

Given that things work quite differently in our country when it comes to the music industry and that the structure here is not well mapped out or organized, many of our artists’ main source of cash is performances at events, and concerts. With the halt on concerts and social gatherings that attract big numbers of people due to the global pandemic, it has been quite a challenge for some of our artists, more so without music in digital streaming platforms so as to earn loyalty revenue. Therefore, in the next chapter I’ll be taking you through how you can monetize your craft through digital revenue, and make money off the music you make. 😁❤

A must read and good reference book about how the music business I’d recommend is “All You Need to Know about the Music Business” by Donald Passman) and “This Business of Music. 10th edition. Knowledge is Power!”