If youstill own a traditional record label, you don’t have a lot of options. You have to find a way to remain competitive in a digital age or go out of business. Before, artists weren’t able to completely bankroll their own endeavors and record deals were their way to go far. Those days are over. With sales of physical CDs dropping, music stores are quickly going out of business, and even FM radio is taking a hit. Mainstream genres like country, R&B/Rap, or pop are still doing well but alternative genres do better on internet, which gives new artists less incentive to seek a deal with a major label.
- Most labels outsource production of CDs but that’s a waste of valuable resources when ITunes alone made up to 25% of all music sells in 2009, with no signs that it would decrease. It made up almost 70% of all digital sales. Digital sells are far from making up the majority but labels should think of their relevancy as this becomes the norm. They need to offer more than independent avenues.
- Unsigned bands are taking advantage of companies like TuneCore and CDBaby and their sells are increasing faster than established artists. Popular software programs like ProTools and Logic can run on mid-range laptops, and with a few plug-ins, many artists don’t need to book time at an expensive studio to produce albums. Sites like Bandcamp allow fans to pay want they want for music from their favorite artists. The site also allows bands to recommend artists to their fans; creating an atmosphere of friendliness instead of ruthless competition.
- A&R departments have lost some of their relevancy also. There’s not as much of a need to send someone out to a show when popular music blogs will put a spotlight on bands they think deserve attention. This is word of mouth advertising that, from a reliable source, more people will listen to than traditional marketing. Artists no longer need to rely on radio spins or an ad in a physical magazine to get heard; not when magazines are also declining in popularity.
- Labels must come to terms with the fact that much of what they’re used to providing has been replaced by ease of access to the internet. There’s more and more cost effective ways to drive traffic to their main site and social media pages every day. From there they can grow their email lists and send any relevant information directly to fans.
- As labels continue to lose money, many try to restructure. But taking out another loan on top of previous debts can be crippling in itself. It can be a sign that you aren’t making enough money to be worth keeping around; years of history or not, which puts extra stress on remaining labels to pick up the slack. Some companies are using apps in creative ways that allow them to be more innovative than before.
- Saving your label is still possible if you’re willing to make changes and are able to make them in time. While artists are making their success independently, there are still bands who view signing with a label as giving them a legitimacy they couldn’t gain alone. The internet’s accessibility is also a fault. There are a lot of bands to filter through. And a lot of them want to get their songs in commercials, which is easier to do with backing from a label. But there’s also a fear that artists will end up thousands of dollars in debt with a major label if they don’t make it big.