Major & Independent Record Labels

Major record and independent record labels. Between the two, what are the main differences?

One of the biggest differences between the two is that firstly the major labels will actually make the artist in question hand over the rights for their music as part of their contract. Therefore, leaving all the work to the label company. With the independent labels, the company will reach an agreement with a contract with the artist to supply their funds and support them but wont actually get the rights for their music. With the rights, the artist is then free to sell any music in any amount he/she likes. For example; radio/TV advert soundtracks or films even. The major labels though will offer a lot more money more often than not to have this extra power with their client.


The major three record labels:

The major labels have the majority of the power in the music industry, at the end of the day, money talks! Following research I found the following information regarding major and independent record labels. Including the "big 3" and some of it's history.

Universal Music Group, Sony BMG, and Warner Music Group are the powerful "big three" whom control around 88% of the music industry market today. Artists who are signed to one of these major record label are either signed to the 'central label' or signed to a subsidiary of that label. A band might be signed to Sony, or it might be signed to Simco, RCA Records, Columbia Records or EPIC Records, all some of many subsidiaries of Sony. These subsidiary labels have their own way of working, staff, they sign their own artists and they make most of their own financial decisions. The "main" company sets their overall budget and makes decisions regarding things like reducing staff as after all they do have the power.

In addition, a poor performance financially can close the subsidiary. Its artists would then be distributed among the other subsidiaries under the major label. The conglomerate, UMG or Sony for example will always keep their signed artist, unless sold of course. 

Controversy of once "big four":
Pre to September 2012, EMI Music Group was part of the "big four" major record labels in the worldwide industry. The UK based company, formed in 1931, announced on 12th November 2011, that EMI would sell its recorded music operations to UMG for £1.2 billion ($1.9 billion) and its music publishing operations to Sony Publishing for $2.2 billion. Among the other companies that had competed for the recorded music business was Warner Music Group which was reported to have made a $2 billion bid. Prior to the sale EMI controlled just under 10% of the music industry with signed artist such as Blur and The Beatles (1960-70). 



Independent Record Labels:

A few examples of independent companies are M.A.S. Records, Mad Decent and XL Recordings. These control much smaller amounts of artists but the day to day life of the business is very similar.