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What Does a Record Company Do?

June 22, 2007 1:32 PM | Education | Comments (1)

If you get signed to a record company, you the artist will go into the studio and record songs for the record company.   The record company makes copies of the master recording and ships it to a distributor.  The distributor is a wholesaler who then sells the CDs to retail outlets like Best Buy, Sam Goody and Tower Records. 

The record company then pumps money into marketing by advertising and promoting your music with hopes of selling records, thus making you a superstar and becoming rich!

It is not as easy as it sounds.  It takes a lot of hard work by a talented group of people.  Everyone has to work together to make this happen.  There are usually many people behind the scenes working to make an artist a superstar.

 Record companies often categorized into 4 groups:

·    Major label record companies - have the recording and operating resources to complete all function to sell records.  Major label record companies are integrated in that they can handle the promotion, sales, marketing, and distribution to sell music. Major label record companies are Arista, Atlantic, Capital, and Sony.

·      Major label affiliate labels have special agreements with the major label record companies, where the major label may fund the smaller labels recording and operating expenses in exchange for a portion of the smaller label profits.

·      Independent labels - distributes records through major labels.  Independent labels have few employees.  They tend to find talent, sign the talent, sees to it the music is recorded and contracts with major record labels to perform the promotion, marketing, and other functions.

·    True independent labels Has no association with a major label and distribute their music through independent distributors. 

The A&R (Artists & Repertoire) Department

The A&R department is the talent scout.  They are in charge of finding new talents.  They are the eyes and ears of the record company.   However, not because you get signed to a record label because an A&R representative likes you it doesn’t mean your CD will ever get produced and released.  Executives higher in the company could cancel your deal if they feel your CD will not sell.   A record company will have to invest several hundred thousands of dollars to release your CD, so they will be extremely cautious on whom they release.

The Marketing and Sales Department

This department is responsible for getting the public excited about your music and first selling to retail stores the idea of carrying your CD.  They are responsible for promotional merchandise, advertising your CD, in store displays, publicity, your CD cover, etc.

The Promotions Department

This department is responsible for getting your music played on the radio.  The individuals in this department will visit the various radio stations to convince them to play your material.  If your material doesn’t get played, no one will now how you are.  People will look at your CD in the retail store and wonder who you are.  There is also a direct correlation with CD sales vs. how many times a song for that CD gets played on the radio.  More air time on the radio equals more CD sales for the record companies.

Remember music is art, but to the record companies, it’s about money.  Keep in mind that it’s a business.  Keep in mind everyone is out to make money.  The minute people believe that you will not make money for them, you will be dropped and these same people will turn to seek other new artists that they believe will make them money.  Unfortunately, the record business doesn’t believe in grooming people.  If your first CD isn’t a success, you are out.  There are rarely second chances.  There are always other talented people behind you who what their shot at fame.

Distribution 

Most major retailers such as Tower records will not carry a CD unless the record has a distributor.  A strong distributor ensures that your CD will be available in enough places so your CD will sell to ultimately make money.    Major labels use large distributors who are better able to get record stores stocked.  After years of consolidation, there are only 5 major national wholesale distributors in the US who are owned by conglomerates who also own major record labels.  They are: 

·        BMG (distributes Arista, BMG and RCA)

·        EMI (distributes Capital and Virg.)

·        Sony Music (distributes Columbia, Epic and Sony)

·       Universal Music Group (distributes Interscope, Island/Def Jam, and MCA)

·       WEA (distributes Atlantic, Elektra and Warner Bros.)

 Distribution via the Internet 

Record labels and artists are increasingly using the web to distribute their music.  Unknown artists can also use sites like this one, mZeus.com, to generate buzz about their music.  However, unknown artists will still have to work hard to get the buzz going about their music. Ultimately, signing a contract with a major record label is the way to go.  The major record labels have the financial muscle and people to give you a good shot at becoming famous. 


 

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You just gave me a great idea to start an indie record company!!!!

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