The Pros and Cons of Artist-Owned Record Labels

The U.K. newspaper The Independent recently ran a piece focusing on the wide range of independent artists that have opted to start their own labels.

For new artists, signing with a peer-run label has a lot of advantages. They probably won’t receive anything upfront to help pay the rent, but new signees to these boutique firms get to reap the fruits of the industry connections and the tacit endorsement from the label’s famous head.

But aside from the fact that pretty much every record label is losing money right now, that most artists have zero business sense, and that getting a label off the ground often involves a great deal of investment, why would any artist want to run a label again? 

Their personal label might add to their brand (think Timbaland’s Mosley Music Group), but a lot of indie artists opting to go this route appear more interested in brokering good music than earning a profit, and they don’t make empty financial promises to their artists. For the famous artists running these labels, a lot of the financial burden normally associated with label is minimized: (most) already have access to recording studios, well-known producers and writers that might be willing to do them a favor (or work at a discount). And since a considerable portion of marketing has shifted to blogs and Twitter feeds, ad spending can be cut in half.

But paradoxically, more financially successful artists sometimes have more trouble with these operations than their smaller counterparts. Major recording artists have more money than indies to spend on such operations, which means they can afford to hire people who handle the grunt work, pay the costs of production and distribution, and support full-fledged marketing campaigns. But because even well established indie labels aren’t shipping many units these days, putting that extra money in doesn’t always make sense. This is part of the reason why Mariah Carey’s label, Crave, folded in its first year, and why Lily Allen’s label never got off the ground.

New artists might find more ease and support being signed to another artist’s label, where stress is not as prevalent, but because it likely won’t be monetary, these boutique shops are likely to serve as stepping stones. As smaller artists move towards their larger goal, and peer-run labels will have an outlet to release their work on until more substantial options present themselves.

Tagged as: DIY labels, record labels