What’s the real deal with record labels? When you think of labels, you think contracts, money, fame. Little did you know that behind that, there might be a whole lot of bullshit.

Take for example TORRES, a mid-level indie artist that met her dreams when she signed to 4AD. Despite gaining press recognition, constant tour offers, and a decent amount of streams, the label dropped her from her 3-records deal because the album wasn’t selling enough for them. It happened straight away, and although it turned out to be a blessing in disguise (as she soon signed to Merge Records), Torres found herself screwed over by the institution that was supposed to elevate her professionally. Record deals may save the life and career of small artists, enabling them to pay the bills and rely upon a level of certainty; but they also actively contribute to making it worse. If it was only for the bad deals and sketchy contracts, it would be easy. Unfortunately, major record labels also get a consistent amount of money coming straight from streaming platforms’ royalty revenue. Right now, the big four (Sony, EMI, Universal, and Warner) make about $1 million per hour from streaming alone! Gotta go check my bank account as I’m pretty sure I’ll never see that kind of revenue. It’s not only Torres (who, by the way, has more than 3 million streams on Spotify alone on her last single Three Futures) to have suffered from poor record deals - they never disclosed how much she was supposed to make. Grimes had similar problems in 2018 with the same label. And now that she’s finally out of her deal, she signed with Columbia.

Moreover, it is common knowledge that record labels don’t invest in artist development anymore, that is to say, that they start to show interest in acts that have already developed an aesthetic and a following on their own.

It bears the question then, why would anyone need a label? If studios and recording equipment are affordable and accessible, manufacturing of physical copies and merchandising can be dealt with directly by the artist, and finally digital distribution is a click away, the industry evolved and record labels are gatekeeping an open field that is free for everyone, seemingly offering only more hassle to emerging acts.

A recent development is the “360° deal” where the label gets a smaller cut from the music revenue but it also receives income from all other activities where the artist could be involved (such as endorsement deals, merch sales, concert tickets, and in some cases also publishing). The record label, therefore, acts as a manager for the artist while also becoming the middleman in other fields otherwise exclusive to the artist. Lady Gaga is known to have been under a 360° deal, which could be the key to her success, but other artists may not be as fortunate.

Although it might be argued that labels are as a matter of fact businesses and that if they don’t make money, they go bankrupt, I still struggle to see it this way when their sources of income are endless, and most of the ‘independent’ labels are subsidiaries of majors.

The takeaways are to always always always read your contracts, best if side-by-side with your lawyer. If label representatives tell you that they want your release to be a commercial success, ask them what is their measure of success. There are no friends in the show biz. The arts industry is a shitshow and you should defend yourself, especially if you get your first deal, or you change the label, or they ask you to be someone else like Torres and Grimes.