The primary functions of a record label used to be A&R, marketing, and distribution. Labels used to hit the pavement and discover the next big thing. And when they found that next big thing, labels would invest months, sometimes years, in developing that artist from rookie musician to global sensation. This was all supported by a small army marketing the artist and leveraging the label’s distribution network to get those records, cassettes, and CDs in-stores.
Today, the function of A&Rs
at record labels has come under question as artists are signed primarily off the strength of social followers and streaming numbers, where there is already an existing fan base that the record label can take a percentage of. Marketing has found its way out of the big label corporate offices into niche music marketing businesses or artists simply taking the DIY approach
. And when it comes to distribution, well, record labels simply aren’t necessary anymore
Anyone can distribute their music to digital service providers (also known as DSPs) for a small fee. Yes, there is still a certain cache that comes with being signed to a label and no doubt doors can be opened easier for major label artists, but this is waning.
So what happens to record labels? In 10 years, you will see many sub-labels of majors shuttered. For the heavy hitters, i.e. Sony Music, a new model will evolve that will see these corporations using their contacts and bank accounts to become glorified marketing agencies. Or, the major corporations behind these labels will simply shutter their music arms altogether in favor of more profitable lines of business. Which brings the next point…