All Record Labels Are Not Created Equal

By, Wendy Day from Rap Coalition (www.WendyDay.com)

The term “record label” stands for many different types of companies that put out music. It can signify a conglomerate like Sony or Universal which are huge well-established multi-national corporations with offices in many countries around the world, or it can indicate a small artist-owned company with a staff of one or two, putting out their own CDs, like Killer Mike’s GrindTime Records. Therefore, an artist who just wants to sign to a “record label,” ANY record label, is doing him or herself a real injustice unless they do the proper research and have a solid understanding of how the music business operates.

Back in the 60s, 70s, and 80s, we could all feel sorry for the artists who were unfairly exploited and taken advantage of. But with all of the information available today in books, and on-line (much of which is free), it’s hard to feel sorry for folks who get jerked because they didn’t take the time to understand what they were doing before they jumped in with both feet. Action is a wonderful thing, provided it is backed up with the proper research, planning, and understanding. Greed and quick, uninformed decisions have never been a good thing.

Here is some of that free information of which I speak.

The Major Labels

A major label is a large company that has numerous departments that are involved in propelling an artist’s career forward. All of the major labels are international, and all of them are publicly traded corporations-- which mean they answer to stockholders. Companies that have stockholders, often focus on the bottom line financially because they depend on people to buy and sell their stock, therefore many of the decisions they make are influenced by stock prices and dividend payments.

Most of these companies also have other businesses that make up the corporation, so selling CDs is just a small part of their money making operation. Major labels are huge. If the marketplace is an ocean, major labels are cruise ships. They are big and heavy, carry a lot of people on board, and take a long time to stop or to make turns in the water. Because of their size, they are relatively safe, but also because of their size it can take a lot longer to accomplish anything, like releasing a CD for an artist into the marketplace.

The major labels are:
• Warner Bros, which consists of Warner and Atlantic Records, two separate companies. They also have an “incubator” called Asylum, which signs artists that they don’t feel are able to go Gold or Platinum yet, or possibly at all. They are a place for smaller labels without extensive experience in the marketplace, to “incubate.”

• Sony, which consists of Sony, Epic, Jive, and J Records. Their indie distribution arm is called RED Distribution. They are a good distributor for independent record labels who are properly financed and have some experience in the marketplace.

• Universal Records, which consists of Motown, Republic, Interscope, and Island/Def Jam. Uni’s “incubator” is called Fontana.

• And the last major left is now a combined effort of EMI and Virgin. They just had a large round of layoffs and I am closely watching to see how they restructure and resurface in the marketplace. This has affected EMI, Virgin, and Capitol Records. Their “incubator” is called Imperial.

The Mini-Majors

There are also two large independent rap distributors/labels in rap that must be mentioned. Folks in the industry usually refer to them as “Mini Majors” because they are quite large. The major labels don’t necessarily consider them competition, but in the past 5 to 7 years, they have made quite a bit of noise in the rap marketplace: Koch and TVT. Both labels/distributors usually offer splits that are more favorable than the major labels because they have a different business model than the major labels. Both have smaller staffs and can react in the marketplace more quickly than a major label.

Also, with the former New York Attorney General, Elliott Spitzer, coming down on the major labels for payola in the past few years, this opened up radio a bit for radio spins for independent labels. Both TVT and Koch fall into this category, allowing them increased airplay at radio today.

The Sub-Labels

A step removed from the major distributors and the large independent distributors, are the Sub-Labels. These are the companies picked up by the major labels because they see them as closer to the streets and more effective at finding and nurturing talent. Some of the more successful sub-labels include:
Under Def Jam:
Ludacris’ DTP, Young Jeezy’s Corporate Thugz, etc.
Under Interscope:
Dre’s Aftermath, 50 Cent’s G-Unit, Eminem’s Shady Records, Mr Colliparks’ Collipark Records, Polow Tha Don’s Zone 4, Akon’s Konvict Records, etc.
Under Universal:
Steve Rifkind’s SRC, Cash Money, etc.
Under Atlantic:
T.I.’s Grand Hustle, Poe Boy Records, Ted Lucas’ Slip N Slide, etc.
Under J Records:
Bryan Leach’s Polo Grounds, etc.

Hopefully, I haven’t left anyone out of my Major, Mini-Major, and Sub-Label examples (if I did, it wasn’t intentional).

Indie Labels

The remaining record labels make up the largest portion of the businesses putting out rap CDs: independent record labels. This includes successful labels like D4L, SwishaHouse, Thizz Nation, etc; as well as small labels like Killer Mike’s GrindTime, TMI Boyz’ TMI Entertainment, XVII’s Major Entertainment, JAG’s On Tha Grind, etc. If the major labels are cruise ships, the indie labels are jet skis. They can move quickly, dart in and out of obstacles in the water, change direction quickly, and turn around in a very small space. Being able to react to the marketplace and change quickly to meet new demands is important. Major labels are not able to do this.

Having said all this, just signing to any “record label” is not a smart move. Any person with a little bit of money can press up business cards saying they are a record label. Anyone can spend three grand to wrap a van and call themselves a record label. If an artist is short-sighted enough to sign to someone who can’t afford to market or promote them, or someone without the proper experience to put out a CD, then what? Recording contracts are for 5 to 7 years in length. For some artists, that’s an entire career. If the label can’t afford to work the record properly, it’s not as if the artist can walk away and go elsewhere. A contract is binding. There are a million rappers stuck in bad deals who will never see the light of day.

If this business is going to be your career, whether you plan to be in the spotlight (like a rapper, producer or DJ) or behind the scenes (like a manager, lawyer, publicist, or street team member), it’s important to learn the industry, learn who’s who, and do business with those who are worthy of your talents, those who pay properly, and those who are good at what they do.