Last Updated: May 2023-

Music streaming is the present of how we consume music. Record labels have had to adapt in some uncomfortable ways.

Most consider independent record labels the unsung heroes of the music industry. They play an important part in discovering upcoming artists, helping them hone their craft, and getting them the materials and public eye they need to step into the spotlight.

The slow fade of physical CDs continues. While vinyl records are selling more, no one is making millions of dollars off these sales. It’s the new and soaring prevalence of streaming services that is where the most money is being made.

This money is not going to the record labels and it is not going to the artist. It’s going to the brands overseeing the distribution channels.

How do indie record labels step out into the future without losing sight of their original values – read on!

How Does A Record Label Decide What Music Streaming Services To Release On?

There’s an endless array of streaming services for artists to choose from when they’re releasing new music.

The tricky part is discerning between whether it’s best to single in on a few, or even one platform, or alternatively, publishing your music everywhere possible.

That’s where record labels come in handy. The best option for an artist may to be host their entire catalogue on every service out there, in order to gain the most listeners possible.

There are exceedingly different audiences using Spotify instead of Apple Music, SoundCloud instead of Bandcamp, and highlighting those disparities is fundamental to knowing how to best target your audience. In some cases, it may be best to refrain from posting your music on any of these platforms at all.

Is It Better For A Record Label To Plan Exclusive Releases?

When you initially release your music, you don’t want to have it widely available just immediately.

This is an agreement a record label will help you make with the streaming service of your choice, because it’s beneficial for them to hold exclusive first rights. Some artists have their work on sale for a duration of time before releasing it for free. It all depends on the marketing strategy that would achieve the optimum audience for your music.

Exclusive releases have to be carefully orchestrated. You don’t want it to limit exposure or hurt your potential reach.

For every artist, it should be a conversation with their label on how to proceed with exclusive releases, whether to offer free music or to put it behind a paywall of some kind, and how to maximize the reach of music streaming.

Opting To Partner With Free Music Streaming Services i.e. YouTube Or SoundCloud

Another option to go is to look at free music streaming services that could maximize your reach.

Some might believe, in music, it’s always best to make decisions based on what will lead to instant financial gain, but the music industry is slightly more complicated than that.

Making your music accessible to everybody everywhere, including on free services like YouTube Music and SoundCloud, is often a good idea when artists are just starting out and trying to get their name out there.

Amassing a solid fan base is priceless. The aforementioned streaming services make listeners feel like they are closer to the artists they listen to, and an artist can interact with them directly.

If your channel is attaining the right amount of views, also, a label knows how to set up a partnership with YouTube so that you can receive a cut of the profit made from advertisers. Thereby ‘free’ becomes ‘monetized’ at a certain level of success.

Is Streaming Good For Record Labels?

According to the RIAA, up to 75% of total revenue derived from recorded music comes from music streaming. A record label makes their best profits off recorded music hence why collaboration with streaming is a must no matter the type of music or label.

Physical sales and digital downloads don’t cut it anymore. Streaming is the most effective way to distribute recorded music.

While on the surface royalties from music streaming services are barely anything, streaming is argued by some to be beneficial.

More People Are Listening To Music

Music is more widely accessible and more people are listening to music than ever before. This translates to more potential customers for a record label.

More Musicians Are Getting Heard

More niche artists can get out there, be heard, and are finding audiences. This helps record labels establish their talent.

Streaming Combats Piracy In A Massive Way

It is so easy to sign up for Spotify that this streaming service alone is pulling people from piracy websites. This allows record labels to recoup some of the costs that would otherwise be lost due to piracy.

How Record Labels Can Make Money In 2023 From Artists

Record labels may not be recouping the money from recorded music sales they were in the 1990s and before.

There is always a way to make money for a label. They still have streaming royalties and physical sales but more focus is put on booking and touring, merchandise sales, and licensing fees for the use of music in television, streaming series, films and movies, commercials, and video games. This all adds up to the monetary rewards that can hopefully sustain a record label as they continue to adapt to a future of streaming, less royalties for recorded music, and an audience firmly planted in the belief that ‘music is free’.

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