Independent Record Labels – What You Need to Know

With the rise of instant communication, artists and musicians no longer must follow the narrow path guarded by the biggest names in the industry. Just as alternatively funded books, TV shows, and movies have found their way to the mainstream outside of the major networks, so, too, have indie music labels risen to success without the money and clout of the ‘Big Three’.

If you’ve got talent, passion, and are willing to put in the work, you can become successful as an independently labeled music artist. Below is our guide to independent record labels.

How the Mighty Have Fallen

When the music industry’s influence was at its peak, four major companies enjoyed most of the power: Sony, Warner, EMI, and Universal. In 2012, Universal Music Group purchased EMI, and the Big Four became the Big Three. Their chokehold has loosened somewhat thanks to the existence of alternative mediums for production, distribution, and marketing. It’s no longer a foregone conclusion that to make it big, you have to sign with the bigwigs.

In 2017, independent (or Indie) music labels collectively captured 39.9% of the market, an increase of 1.5% since 2016. While no single independent label wields as much influence as any of those powerhouses, the growing success of smaller record companies makes them a serious contender in the market when taken as a whole. Smaller labels offer many advantages to artists, especially those concerned with retaining the right to decide how their work is used.

Sony Music Entertainment, Warner Music Group, and Universal Music Group controlled over two-thirds of the music industry market share until 2016, when Indie labels rose to one over third. The waning influence of these market leaders may be partially attributed to the prevalence of digital formats. Downloading and streaming are growing in popularity, and this provides instant, direct access to a potential audience that doesn’t require actually walking into a building.

Digital music is convenient to store, easier to ‘taste-test’ because of sample clips, and provides instant fulfillment as soon as the audience hears and wants it. While shelf space in physical stores understandably limited the selection available at a given time, digital music has no such restrictions. Niche music genres have sprung up to fill every unique taste, promising something for everyone.

Though digital sales account for 16% of global music revenues, it is quickly falling behind the digital streaming market. Streaming platforms such as Apple Music, Pandora, and Spotify are currently overtaking downloads in popularity and revenue, taking the storage convenience one step further – to no storage at all.

In 2017, streaming services accounted for 38.4% of global music income, and became the industry’s single largest source of revenue for the first time in history. In the same year, 64 million new subscribers joined digital streaming services, bringing the total number of paid users to 176 million. When combined, all digital revenue captured just over half (54%) of total music market revenue.

Indie music is fully capable of capitalizing on this revenue stream, and savvy labels will utilize it to the fullest as industry trends emerge.  In fact, artists signed with independent labels can make as much as four times more in royalties from digital streaming services than their big-label counterparts.

The Rise of Indie

In the 1980s, music established outside the mainstream was known as ‘Alternative’. Without the Internet’s ubiquitous presence, such music survived only by word of mouth and promoted mostly by airtime on college radio stations. By the mid-90s, such music was all the rage, to the point that some ‘fringe’ bands such as Green Day, Nine Inch Nails, and Pearl Jam had worked their way into the mainstream.

As the internet gained traction in the early 2000s, people suddenly had an easier way to share their favorite tracks and get the word out about their latest music discoveries. In particular, the launch of MySpace in 2003 kicked off a new era of sharing musical tastes and turned music into a social experience. By friending their favorite artists and embedding widgets with a beloved song on their profile, users adopted music into their identity in a way that hadn’t been done before.

At the same time, as Internet access grew more commonplace, illegal file sharing and piracy skyrocketed. This brought exposure to certain artists they may not otherwise have gotten, but it also ate into the potential for profit. As the prevalence of digital media sharing showed no signs of abating, companies decided to capitalize on it.

Apple launched iTunes in April of 2003. Between their signature iPods and other brands’ MP3 players, the legal download industry began making it just as easy to buy music as it was to steal it. This solidified music’s entrance into the digital realm, where it continues to gain market share over hard-copy content like CDs. Without the physical limitations of shelf space and CD manufacture, digital production and distribution offers alternative means of exposure to artists who want to forego the major label route.

Between 2003 and 2012, the number of independent artists rose by 71%. Computer equipment was becoming smaller, cheaper, and more widely distributed—meaning that you no longer needed a professional recording studio in order to produce music. There are now plenty of effective means to advertise that don’t include national television, radio, or print magazine ads. Social media is now so commonplace that it rivals the power of the Big Three Networks in their heyday.

This is good news for independent record labels, because the marketing potential of social media is seemingly endless. Though the rise and fall of various platforms poses an obstacle to large corporate entities bent on formulaic success, the savvy social media marketer is adept at changing lanes.

More and more people alive today have never known a time without the Internet and now consume most content via smartphones. Traditional forms of advertising such as print and billboards are failing. Therefore, knowing how to tailor digital content to appeal to a large audience that wants to access information instantly is more important than ever.

Labels, Labels Everywhere

In the past few years, hundreds of new labels have emerged. Some, like GOOD Music, founded by Kanye West in 2004, enjoy one of the big boys as a parent company (in this case, Universal Music Group). Others, such as Sumerian Records, remain completely independent. Yet other labels have been around for a while but are getting attention by representing artists who are going from the ‘fringes’ into the mainstream, or picking up better-known artists who broke away from the Big Three.

Founded in 2006, “by artists, for artists”, Sumerian signed its first non-US band, Fellsilent, in 2008. Sumerian represents metal and hardcore rock bands such as Asking Alexandra, The Faceless, and Born of Osiris. Based in both LA and DC, the label tirelessly promotes up-and-coming talent in this increasingly competitive industry.

Since its debut in 1996, Easy Star Records has taken hold of the progressive reggae scene, having represented ten records in the number one slot for the reggae genre on Billboard. They represent musicians both inside and outside the US, from places as diverse as Jamaica and New Zealand, as well as the UK. Their roster includes artists like Gentleman’s Dub Club, Sugar Minot, and The Black Seeds.

Partisan Records, created in 2007, picked up Holy Sons’ album Decline of the West almost immediately after their founding, and soon added Deer Tick’s War Elephant. This launched them into being quite a successful label. Focusing on indie rock, folk, and avante-garde, Partisan gained international acclaim  for making a Top 5 Uk chart in 2018, and winning their first-ever Grammy nomination in 2019 for Deran by Bombino.

Focusing mostly on independent punk, hip hop, and rap, Hopeless Records has gained prestige by signing artists like Avenged Sevenfold, Silverstein, Thrice, and All Time Low. As measured by market share, Hopeless has become one of the largest independent labels since its incorporation in 1993.

Launched in 2007 by American music executive Daniel Glass, Glassnote Records  most notably represents indie rock band Mumford and Sons, and the indie pop group Phoenix. Winning a Best Alternative Music award for Wolfgang Amadeus Phoenix in 2009, this group has gone on to release Bankrupt! and Ti Amo under the Glassnote label.

Founded in 2001, Babygrande Records has a catalog of 3,000+ electronic dance music, hip-hop, and indie rock music videos, albums, and other online content. Representing artists like Kasim Keto, Freeway, The Alchemist, Brand Nubian, U-God, Jedi Mind Tricks, and GZA, they’ve gone through the most turbulent decade in the ever-changing music industry and come out stronger than ever.

These companies are just a few of the many thriving independent record labels working hard to represent music artists across all genres. Somewhere out there is a label that will appreciate your music, but it could take some time to find them.

Going Solo

Not only are many artists rejecting major label deals, some are rejecting the idea of labels altogether.

One such artist is Chance the Rapper. Born in Chicago in 1993, Chancellor Johnathan Bennet began rapping under the name Chano in high school. In February 2012, Complex magazine featured him in “10 new Chicago Rappers to watch out for”, and critical acclaim started to roll in.

During a ten day school suspension for Marijuana possession, he recorded 10 Day, his first solo mixtape. Kicking off a habit of offering music for free, his debut album was released as a free download from the mixtape website DatPiff on April 3, 2012.

Eventually rebranding himself as Chance the Rapper, he dropped his third free mixtape, titled Coloring Book, in May of 2016. Shamelessly unafraid to collaborate with a diverse range of musicians, this collection included guests such as Lil Wayne, T-Pain, Justin Bieber, Kanye West, and 2 Chainz. Reaching 57.3 million in the first week of release, Coloring Book became the first album to chart on Billboard 200 from streaming alone.

Many labels came calling, wanting to sign him up, but Chance refused them all. To date, he’s still producing and releasing music without a label, relying primarily on touring and merchandising revenues for income.

It remains to be seen if Chance will ever sign with any music label. He seems to be enjoying his independence, and doing just fine. This is certainly not the norm, but it demonstrates the potential  artists have to not only promote and control their own music, but be successful at it, as well.

First Steps to Success

But before worrying about what independent music label to pursue, there are a few important elements to consider. These tips will help you prepare for the music world, no matter which path you take.

Have a plan.

Don’t have nebulous goals. Identify your genre, target audience, and intended platforms before seeking out a label. If you don’t know what you are and what you want, how will you get anyone to work with you?

Don’t quit your day job.

Keeping your former source of income isn’t admitting defeat; it’s being realistic. Even if you are destined to make it big, unforeseen circumstances could delay any number of things in your music journey, leaving you short on cash and in a real pinch. Don’t overburden yourself, but don’t burn any bridges, either.

Know your legal terms.

You’ll want to consult a contract lawyer to review documents before signing anything binding. While Indie contracts are usually shorter, simpler, and less confusing then those negotiated by big labels, you’ll want to know what you’re dealing with to avoid confusion or misunderstanding. Becoming familiar with basic contract terms before you approach a label will help you understand what to expect.

Surround yourself with like-minded people.

This may sound obvious, but when people don’t like you, they probably won’t work well with you. Choosing an Indie label is all about the relationship it can give you with everyone involved, because the project pool will be smaller and more intimate. Use that sense of community to find people who share your goals and like your music for what it is.

Think of yourself as a product to sell.

Though it may grate on artistic sensibilities, music is a business. There’s intense competition, and to stand out, you have to develop a brand. Whether you focus on hard copy sales, downloads, streaming royalties, or merchandise licensing, you are still selling something: yourself. Not just a collection of notes and words, but you—the writer, composer and/or performer.

Treat it like a business

You’re going to need business management skills to pull it all together. This is especially true when signing with independent music labels, because their staff is generally smaller and more responsibility falls to the artist. This is one reason that artists with smaller labels generally keep more of the profits, but you need to realize going in that you may have to do much more of the work yourself.

You may need to hire or consult with accountants, marketers, merchandisers, distributors, assistants, lawyers, and perhaps even a business manager. Even if you’re fully capable of handling some of these aspects or one of them is actually your day job, there are only so many hours in the day. That’s why surrounding yourself with competent people you can trust is so important.

Negotiate partnership terms now, not later.

If you have multiple members in your music band or group, a written contract will be necessary to define exactly how the profits will be divided, who owns what percentage of the intellectual property of the songs, and how major decisions will be settled. Properly filing paperwork in all the right places now can prevent major headaches later.

Be a savvy socializer.

This doesn’t just mean beef up your profile on your favorite social media outlet. You’ll not only need to vary your portfolio across multiple platforms to guard against crashes, hacks, or sudden account loss, but you’ll need to develop something you maintain and control: a website.

Register a domain that encapsulates who you are and is easily identifiable as tied to you, your music, or your band name. Having this constant presence guards against the flux of social media popularity and any associated pitfalls, while giving you a professional, digital “storefront” to represent your work.

It’s also important to build and maintain connections in the music community. Message boards, chat rooms, and social media feeds are all good places to find and network with people in the business. Don’t be too eager to promote yourself, and only approach possible connections from the angle of what you can do for them. Many artists are clamoring for attention, and only the most professional are likely to be noticed.

Be aware of copyright laws.

Though you own automatic copyright to a piece of music the moment you write down, record, or save it, you may have trouble claiming those rights if you have no way to prove you were the first to do it. Filing all original work with the US copyright office will make your claims of ownership official and give you the ability to sue for damages in the case of infringement.

Get Some Help from the Pros!

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