On Record Companies

We have gone through a revolution when it comes to music production. What used to be limited to a very small number of music producers, singers and bands – namely to be able to go in a studio and record their songs profesionally – has now been made available to the masses. Given that hardware equipment has become relatively cheap and software to produce music is so accessible (you can even produce a lot of music using freeware software) has allowed many people to have bedroom studios, or have a mobile setup which consists of a small keyboard, recording interface, microphone and headphones to create music and publish it online.

So where do record companies stand today. Do we even need record companies when you can post your music on Youtube in minutes and it is available to the whole world?

In the past record companies assumed the role of financial investor for musical acts. Record companies would release budgets to the artists and producers which would later be recouped with record sales. So basically the record company was like a bank with special repayment rules. If the record didn’t sell, the artist owed the company. Sometimes the company decided the artist whose previous record didn’t sell wasn’t worth another investment to make a new record and they kept the artist within contract, not allowing them to release anything for years at a time.

Sometimes the record sold great and the record company recouped their investment (and then some) and the artist would start to get paid after the initial budget was met.

But today, most music is released online and is never produced as a physical CD. Releasing online is pretty easy – especially on sites like Soundcloud, Bandcamp and Youtube. You upload your file, fill in the details in a form and the song is ready for downloading and/or streaming in minutes.

So why would an artist need a record company?

Several reasons – and mostly around promotion and PR. Record companies have no become specialized promotion companies for artists. Basically they charge for their efforts and expertise (either upfront or by being made beneficiaries for future earnings). What an artist needs to consider is this :

  • What will the record company do for me that I cannot do myself?
  • What kind of promotion and PR services will I receive and how much will this cost me?
  • Are there any binding agreements that will prevent me from doing X,Y,Z in the future?

So consider this : you have a youtube account with 200 subscribers. Your video will only be seen by 200 subscribers – and if they all logon to youtube and check their subscriptions.

The record company might have their own channel that has millions of subscribers (because they also represent major artists) and your video will be watched by hundreds of thousands of people very quickly. The catch? The record company usually takes all the revenue from their online Youtube channel (or Spotify and iTunes accounts). The upside? You get exposure and possible live gig deals.

OR they have their PR people who are on good terms with Radio DJs and TV personalities and can help you go on talk shows or get airplay on the radio. Your option as an independent artist might be limited to cold calling or sending unsolicited press packs. Yeah there is something such as a press pack – a dossier that has your pictures, bio, music and contact details. Professional ones cost money.

Basically you don’t really need a record company to put your music online. To be frank if you are only doing this as a semi-professional hobby you don’t really need to deal with record companies. You can take different approaches to get your music “out there”. There are freelancers that help people promote their music on popular music blogs, Youtube and Spotify playlists, Instagram etc. Just pay for the service and adjust as needed.

However note that when record companies see something that will sell and create momentum they will offer favourable terms. If you are the artist that will create more subscribers on their Youtube channel that will allow smaller acts to piggy back on your popularity, the record companies might be willing to waive their usual compensation.

To be an act that record companies might treat better than the majority you need a good product – great songs sounding great.

I can help you creating the best version of your musical ideas. All you need to do is contact me right now.


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