Reports published earlier this year reveal the growing influence of independent record labels in the worldwide music industry. They now make up as much as approximately 35 to 40 percent of music industry market share.
This is largely great news for independent record labels that are truly independent as well as those operated by major artists. Though major labels still own and oversee the distribution of talent releases, many independent labels have been able to build product on their own accord and being able to deliver their vision as they see fit.
It’s not all good news though. Though independent labels now make up 35 to 40 percent in market share from an ownership perspective, they are still highly vulnerable to the distribution network that the major labels have created. For example, approximately 86 percent of all independently-distributed labels attain their sales via major label distribution, leaving only 14 percent of independent record labels that some would define as the only true independents.
Therefore, analyzing total sales, streams and downloads, there are two notable trends – major labels are far and away dominating distribution, almost having a stranglehold on it, and that ownership of labels are beginning to sway slowly but surely in favor of independently-owned labels.
There are mixed ways in which this can be read however largely what is happening is a new two-tier industry system. In terms of artist development, this is a positive as it now allows independent labels to help develop artists, building their rosters while eventually seeking out major label distribution deals when these artists are ready to capitalize on a major release. There are many artists that have grown out of or into this system, garnering mass plays on YouTube views and streaming services, and making an impact in niches of the consumer base. The ‘negative’ of this system however is that the major labels are still controlling the distribution, controlling essentially the product that gets out and the product that doesn’t get out.
As an artist, the future is going to be about building enough value into an artist’s brand that it would be impossible to deny them distribution in this sense. If Drake, the world’s biggest selling artist of the past two years, were to suddenly drop all label associations, there is such a large amount of value to his name that the labels would come flocking to sign him.
Moving on this on a smaller scale, if as an artist, you can build stream numbers, social media followers, and essentially deliver the metrics that show that there are people listening and that you have an audience at your feet, you should not have any issues securing major label distribution.
The time and money however to build up those followers has to come from somewhere and that is where independent record labels are going to come into play. As an artist, no matter what one may think, you need a team around you to support you financially and artistically. An independent record label is going to be able to fight for your brand in negotiations and they’re going to be able to fund your development to the point where you now have a team of experienced brand builders at your side.
Should these two trends continue, independent record labels are going to have an even larger role to play in artist development. This new two-tier system has the potential to build labels up as much as it does its independently-branded artists.