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57-622: EMI Classics was a record label founded by Thorn EMI in 1990 to reduce the need to create country-specific packaging and catalogues for internationally distributed classical music releases. After Thorn EMI demerged in 1996, its recorded music division became the EMI Music Group . Following the European Commission 's approval of the takeover of EMI Music Group by Universal Music Group in September 2012, EMI Classics

114-551: A "record group" which is, in turn, controlled by a music group. The constituent companies in a music group or record group are sometimes marketed as being "divisions" of the group. From 1929 to 1998, there were six major record labels, known as the Big Six: PolyGram was merged into Universal Music Group (UMG) in 1999, leaving the remaining record labels to be known as the Big Five. In 2004, Sony and BMG agreed to

171-411: A $ 100 million deal with BMG to deliver just six albums, the largest recording deal at the time. Robbie Williams signed an £80m (US$ 125m) contract with EMI . For many other artists, though, for the millions to become tangible , hit albums meeting or exceeding their previous sales figures must follow. Recording contracts may include opt-out clauses for the label in the event an act's popularity dips or

228-405: A 50% profit-share agreement, aka 50–50 deal, not uncommon. In addition, independent labels are often artist-owned (although not always), with a stated intent often being to control the quality of the artist's output. Independent labels usually do not enjoy the resources available to the "big three" and as such will often lag behind them in market shares. However, frequently independent artists manage

285-562: A US Senate committee, that the Byrds never received any of the royalties they had been promised for their biggest hits, " Mr. Tambourine Man " and " Turn! Turn!, Turn! ". A contract either provides for the artist to deliver completed recordings to the label, or for the label to undertake the recording with the artist. For artists without a recording history, the label is often involved in selecting producers, recording studios , additional musicians, and songs to be recorded, and may supervise

342-479: A bigger company. If this is the case it can sometimes give the artist greater freedom than if they were signed directly to the big label. There are many examples of this kind of label, such as Nothing Records , owned by Trent Reznor of Nine Inch Nails ; and Morning Records, owned by the Cooper Temple Clause , who were releasing EPs for years before the company was bought by RCA . If an artist and

399-437: A company that is out of business (and thus cannot sell or distribute their records), and with their existing works unavailable for sale. When one label "buys out" another (or a label is purchased by an outside party), any existing copyrights and contracts held (and masters, if owned by the label) normally go with the sale. This often benefits recording artists, but not always. Distribution deals are often renewed, but occasionally

456-408: A conventional cash advance to sign the artist, who would receive a royalty for sales after expenses were recouped. With the release of the artist's first album, however, the label has an option to pay an additional $ 200,000 in exchange for 30 percent of the net income from all touring, merchandise, endorsements, and fan-club fees. Atlantic would also have the right to approve the act's tour schedule, and

513-456: A deal with a proper label. In 2002, ArtistShare was founded as the Internet's first record label where the releases were directly funded by the artist's fans. Recording contract Labels typically own the copyright in the records their artists make, and also the master copies of those records. An exception is when a label makes a distribution deal with an artist; in this case,

570-621: A joint venture and merged their recorded music division to create the Sony BMG label (which would be renamed Sony Music Entertainment after a 2008 merger); BMG kept its music publishing division separate from Sony BMG and later sold BMG Music Publishing to UMG. In 2007, the remaining record labels—then known as the Big Four—controlled about 70% of the world music market , and about 80% of the United States music market. In 2012,

627-476: A label want to work together, whether an artist has contacted a label directly, usually by sending their team a demo, or the Artists & Repertoire team of the label has scouted the artist and reached out directly, they will usually enter in to a contractual relationship. A label typically enters into an exclusive recording contract with an artist to market the artist's recordings in return for royalties on

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684-462: A large international media group , or somewhere in between. The Association of Independent Music (AIM) defines a 'major' as "a multinational company which (together with the companies in its group) has more than 5% of the world market(s) for the sale of records or music videos." As of 2012 , there are only three labels that can be referred to as "major labels": Universal Music Group , Sony Music , and Warner Music Group . In 2014, AIM estimated that

741-546: A profit, and do not tend to concern themselves with a given performer's lack of business or financial savvy, as artists such as George Michael have discovered. "Walking out" on a deal is very difficult, as is attempting to strike a new deal without completing an old one. Donna Summer signed a new deal with Geffen Records in 1980, and released two albums on Geffen. She was then told by her previous label, Polygram Records , that she owed them another album, per her agreement. She recorded and delivered an album to Polygram that

798-445: A punitive measure, if an artist fails to comply with their contract, or as a strategic measure if negotiations for a new one prove difficult.) Record labels can also become bankrupt like any business, and their masters and copyrights sold or traded as part of their assets. (Occasionally these are purchased by the artists themselves.) Recording artists signed to a failed label can find themselves in limbo, unable to record for anyone but

855-434: A record label is also a publishing company that manages such brands and trademarks, coordinates the production, manufacture , distribution , marketing, promotion, and enforcement of copyright for sound recordings and music videos, while also conducting talent scouting and development of new artists , artist financing and maintaining contracts with recording artists and their managers. The term "record label" derives from

912-605: A return by recording for a much smaller production cost of a typical big label release. Sometimes they are able to recoup their initial advance even with much lower sales numbers. On occasion, established artists, once their record contract has finished, move to an independent label. This often gives the combined advantage of name recognition and more control over one's music along with a larger portion of royalty profits. Artists such as Dolly Parton , Aimee Mann , Prince , Public Enemy , among others, have done this. Historically, companies started in this manner have been re-absorbed into

969-405: Is a risk the label endures as it does not know how well the act's album will sell. Capitol Records suspended Linda Ronstadt 's contract in the early 1970s, as Capitol had spent more money on Ronstadt then it had yielded. She continued to tour partly to pay Capitol back for her 1960s deal, and a string of hits in the mid-1970s allowed her to finally clear the debt. Record companies expect to make

1026-454: Is often marketed as a "unit" or "division" of the parent label, though in most cases, they operate as pseudonym for it and do not exist as a distinct business operation or separate business structure (although trademarks are sometimes registered). A record label may give a musical act an imprint as part of their branding, while other imprints serve to house other activities, such as side ventures of that label. Music collectors often use

1083-684: Is owned by Sony Group Corporation ). Record labels and music publishers that are not under the control of the big three are generally considered to be independent ( indie ), even if they are large corporations with complex structures. The term indie label is sometimes used to refer to only those independent labels that adhere to independent criteria of corporate structure and size, and some consider an indie label to be almost any label that releases non-mainstream music, regardless of its corporate structure. Independent labels are often considered more artist-friendly. Though they may have less sales power, indie labels typically offer larger artist royalty with

1140-646: The Gramophone Company in 1902: HMV classical releases were issued with red labels. EMI Classics was also responsible for managing Pye Records ' classical recordings acquired by Thorn EMI in 1990. EMI Classics also included the Virgin Classics label, both of them were formerly managed under The Blue Note Label Group in the U.S. until 2013. With the sale of EMI Music Group to Universal Music Group in 2012, European regulators forced Universal Music Group to divest itself of EMI Classics, which

1197-553: The Warner Classics label and Virgin Classics would be absorbed into Erato Records . Record label [REDACTED] [REDACTED] [REDACTED] "Big Three" music labels A record label or record company is a brand or trademark of music recordings and music videos , or the company that owns it. Sometimes,

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1254-463: The free software and open source movements and the success of Linux . In the mid-2000s, some music publishing companies began undertaking the work traditionally done by labels. The publisher Sony/ATV Music, for example, leveraged its connections within the Sony family to produce, record, distribute, and promote Elliott Yamin 's debut album under a dormant Sony-owned imprint , rather than waiting for

1311-615: The trademark problems. Prior to this, compact discs distributed globally bore the Angel Records recording angel logo that EMI owned globally. Releases created for distribution in specific countries continued to be distributed under the historical names, with the exception of Columbia, since EMI had sold the Columbia name to Sony Music Entertainment. The red logo harkens back to the Red Seal releases, introduced by EMI predecessor

1368-510: The "parent" of any sublabels. Vanity labels are labels that bear an imprint that gives the impression of an artist's ownership or control, but in fact represent a standard artist/label relationship. In such an arrangement, the artist will control nothing more than the usage of the name on the label, but may enjoy a greater say in the packaging of their work. An example of such a label is the Neutron label owned by ABC while at Phonogram Inc. in

1425-504: The UK. At one point artist Lizzie Tear (under contract with ABC themselves) appeared on the imprint, but it was devoted almost entirely to ABC's offerings and is still used for their re-releases (though Phonogram owns the masters of all the work issued on the label). However, not all labels dedicated to particular artists are completely superficial in origin. Many artists, early in their careers, create their own labels which are later bought out by

1482-504: The United Kingdom alone, spending several weeks at #1. There are plenty of examples of recording contracts available in music business guides, legal texts and also online. When recordings go out of print, this typically happens because either the label has decided that continuing to sell (or distribute) the record will not be profitable, or the licensing agreement with the artist has expired. (Labels may also stop distribution as

1539-546: The United States would typically bear a 4th & B'way logo and would state in the fine print, "4th & B'way™, an Island Records, Inc. company". Collectors discussing labels as brands would say that 4th & B'way is a sublabel or imprint of just "Island" or "Island Records". Similarly, collectors who choose to treat corporations and trademarks as equivalent might say 4th & B'way is an imprint and/or sublabel of both Island Records, Ltd. and that company's sublabel, Island Records, Inc. However, such definitions are complicated by

1596-467: The act releases non-hit albums under the deal. For instance, Mariah Carey was dropped by Virgin Records and her $ 100 million recording deal cancelled after her first album released by the label sold poorly. Record companies put forth huge sums of money to produce, release, and promote an album. Recording time, manufacturing, packaging, photos, distribution, marketing, and music videos are just some of

1653-407: The album will sell better if the artist complies with the label's desired requests or changes. At times, the record label's decisions are prudent ones from a commercial perspective, but these decisions may frustrate artists who feel that their art is being diminished or misrepresented by such actions. In other instances, record labels have shelved artists' albums with no intention of any promotion for

1710-487: The areas where the label must spend money on an act it has signed. The label usually absorbs these expenses, but in some artists' contracts, some of this money may be due back to the label, unless otherwise worded. Advances (upfront money that is paid directly to a recording artist) are normally always owed back to the label. Once (and if) the advance has been paid back from record sales, the artist then begins to see royalty payments for additional sales. Advancing an act money

1767-411: The artist from their contract, leaving the artist in a state of limbo. Artists who have had disputes with their labels over ownership and control of their music have included Taylor Swift , Tinashe , Megan Thee Stallion , Kelly Clarkson , Thirty Seconds to Mars , Clipse , Ciara , JoJo , Michelle Branch , Kesha , Kanye West , Lupe Fiasco , Paul McCartney , and Johnny Cash . In

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1824-415: The artist in question. Reasons for shelving can include the label deciding to focus its resources on other artists on its roster, or the label undergoing a restructure where the person that signed the artist and supports the artist's vision is no longer present to advocate for the artist. In extreme cases, record labels can prevent the release of an artist's music for years, while also declining to release

1881-425: The artist is established and has a loyal fan base. For that reason, labels now have to be more relaxed with the development of artists because longevity is the key to these types of pact. Several artists such as Paramore , Maino , and even Madonna have signed such types of deals. A look at an actual 360 deal offered by Atlantic Records to an artist shows a variation of the structure. Atlantic's document offers

1938-656: The artist, their manager, or another party may own the copyright (and masters), while the record is licensed exclusively to the label for a set period of time. Promotion is a key factor in the success of a record, and is largely the label's responsibility, as is proper distribution of records. While initial recording deals usually yield a smaller percentage of royalties to the artists, subsequent (or re-negotiated) deals can result in much greater profit, or profit potential. A few acts, such as Madonna , Michael Jackson , R.E.M. , U2 , and Janet Jackson , among others, have signed multimillion-dollar deals. Whitney Houston signed

1995-484: The artists may be downloaded free of charge or for a fee that is paid via PayPal or other online payment system. Some of these labels also offer hard copy CDs in addition to direct download. Digital Labels are the latest version of a 'net' label. Whereas 'net' labels were started as a free site, digital labels represent more competition for the major record labels. The new century brought the phenomenon of open-source or open-content record labels. These are inspired by

2052-650: The circular label in the center of a vinyl record which prominently displays the manufacturer's name, along with other information. Within the mainstream music industry , recording artists have traditionally been reliant upon record labels to broaden their consumer base, market their albums, and promote their singles on streaming services, radio, and television. Record labels also provide publicists , who assist performers in gaining positive media coverage, and arrange for their merchandise to be available via stores and other media outlets. Record labels may be small, localized and " independent " ("indie"), or they may be part of

2109-403: The company. Some independent labels become successful enough that major record companies negotiate contracts to either distribute music for the label or in some cases, purchase the label completely, to the point where it functions as an imprint or sublabel. A label used as a trademark or brand and not a company is called an imprint , a term used for a similar concept in publishing . An imprint

2166-400: The corporate mergers that occurred in 1989 (when Island was sold to PolyGram) and 1998 (when PolyGram merged with Universal). PolyGram held sublabels including Mercury, Island and Motown. Island remained registered as corporations in both the United States and UK , but control of its brands changed hands multiple times as new companies were formed, diminishing the corporation's distinction as

2223-412: The decision to remain with the label that made her famous, or sign a deal with a company that was willing to pay her what she felt she was worth, she ultimately signed with RCA. The $ 20 million deal was the biggest recording contract at the time. Ross had signed with RCA for North America only. She signed a separate longterm contract with Capitol/EMI for international territories. That contractual amount

2280-416: The early days of the recording industry, recording labels were absolutely necessary for the success of any artist. The first goal of any new artist or band was to get signed to a contract as soon as possible. In the 1940s, 1950s, and 1960s, many artists were so desperate to sign a contract with a record company that they sometimes ended up signing agreements in which they sold the rights to their recordings to

2337-512: The end of their contract with EMI when their album In Rainbows was released as a " pay what you want " sales model as an online download, but they also returned to a label for a conventional release. Research shows that record labels still control most access to distribution. Computers and internet technology led to an increase in file sharing and direct-to-fan digital distribution, causing music sales to plummet in recent years. Labels and organizations have had to change their strategies and

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2394-528: The label released, and it became a hit. Summer then went back to recording for Geffen Records for her next project . The Mamas & the Papas were forced into a reunion, years after their 1968 breakup, by the letter of their Dunhill Records contract, which required one more album to be completed – which became 1971's People Like Us . Record companies will generally increase royalty rates or give artistic freedom to get acts to re-sign contracts with them once

2451-678: The major divisions of EMI were sold off separately by owner Citigroup : most of EMI's recorded music division was absorbed into UMG; EMI Music Publishing was absorbed into Sony/ATV Music Publishing; finally, EMI's Parlophone and Virgin Classics labels were absorbed into Warner Music Group (WMG) in July 2013. This left the so-called Big Three labels. In 2020 and 2021, both WMG and UMG had their IPO with WMG starting trading at Nasdaq and UMG starting trading at Euronext Amsterdam and leaving only Sony Music as wholly-owned subsidiary of an international conglomerate ( Sony Entertainment which in turn

2508-433: The major labels (two examples are American singer Frank Sinatra 's Reprise Records , which has been owned by Warner Music Group for some time now, and musician Herb Alpert 's A&M Records , now owned by Universal Music Group). Similarly, Madonna 's Maverick Records (started by Madonna with her manager and another partner) was to come under control of Warner Music when Madonna divested herself of controlling shares in

2565-537: The majors had a collective global market share of some 65–70%. Record labels are often under the control of a corporate umbrella organization called a "music group ". A music group is usually affiliated to an international conglomerate " holding company ", which often has non-music divisions as well. A music group controls and consists of music-publishing companies, record (sound recording) manufacturers, record distributors, and record labels. Record companies (manufacturers, distributors, and labels) may also constitute

2622-437: The original deal has been fulfilled. Established acts may otherwise go where they see better opportunity. During 1980, Diana Ross released her album diana , which fulfilled her contract with Motown Records . The album spawned two US top ten hits (the #1 hit " Upside Down " and the #5 " I'm Coming Out ") as well as a UK top ten hit (" My Old Piano ", peaking at #5), and sold 10 million copies worldwide. Ross, however, felt she

2679-507: The output of recording sessions. For established artists, a label is usually less involved in the recording process. The relationship between record labels and artists can be a difficult one. Many artists have had conflicts with their labels over the type of sound or songs they want to make, which can result in the artist's artwork or titles being changed before release. Other artists have had their music prevented from release, or shelved. Record labels generally do this because they believe that

2736-548: The record label in perpetuity. Entertainment lawyers are usually employed by artists to discuss contract terms. Due to advancing technology such as the Internet , the role of labels is rapidly changing, as artists are able to freely distribute their own material through online radio , peer-to-peer file sharing such as BitTorrent , and other services, at little to no cost, but with correspondingly low financial returns. Established artists, such as Nine Inch Nails , whose career

2793-418: The salaries of certain tour and merchandise sales employees hired by the artist. In addition, the label also offers the artist a 30 percent cut of the label's album profits—if any—which represents an improvement from the typical industry royalty of 15 percent. With the Internet now being the dominant source for obtaining music, netlabels have emerged. Depending on the ideals of the net label, music files from

2850-419: The selling price of the recordings. Contracts may extend over short or long durations, and may or may not refer to specific recordings. Established, successful artists tend to be able to renegotiate their contracts to get terms more favorable to them, but Prince 's much-publicized 1994–1996 feud with Warner Bros. Records provides a strong counterexample, as does Roger McGuinn 's claim, made in July 2000 before

2907-400: The term sublabel to refer to either an imprint or a subordinate label company (such as those within a group). For example, in the 1980s and 1990s, 4th & B'way Records (pronounced as "Broadway") was a trademarked brand owned by Island Records Ltd. in the UK and by a subordinate branch, Island Records, Inc., in the United States. The center label on a 4th & Broadway record marketed in

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2964-433: The way they work with artists. New types of deals called "multiple rights" or "360" deals are being made with artists, where labels are given rights and percentages to artist's touring, merchandising, and endorsements . In exchange for these rights, labels usually give higher advance payments to artists, have more patience with artist development, and pay higher percentages of CD sales. These 360 deals are most effective when

3021-455: Was developed with major label backing, announced an end to their major label contracts, citing that the uncooperative nature of the recording industry with these new trends is hurting musicians, fans and the industry as a whole. However, Nine Inch Nails later returned to working with a major label, admitting that they needed the international marketing and promotional reach that a major label can provide. Radiohead also cited similar motives with

3078-481: Was listed for divestment. The label was sold to Warner Music Group , which absorbed EMI Classics into Warner Classics in 2013. Classical recordings were formerly simultaneously released under combinations of Angel , Seraphim , Odeon , Columbia , His Master's Voice , and other labels, in part because competitors own these names in various countries. These were moved under the EMI Classics umbrella to avoid

3135-420: Was never fairly compensated by Motown for her work with The Supremes or her solo releases. When RCA Records offered Ross $ 20 million to sign with them, she gave Motown the chance to match the deal, or at least offer something almost comparable. Motown, believing Ross's solo career was too up-and-down, and not seeing any reason to now compensate her for her earlier Supremes work, offered $ 3 million. Split with

3192-477: Was never officially released. However, it is believed to be as much as $ 20 more million and she has remained currently signed with them for over 30 years and has produced many more successful recordings internationally including her multi-platinum 1991 release, The Force Behind the Power and an even greater success with a greatest hits compilation, One Woman: The Ultimate Collection that sold over 1.5 million in

3249-517: Was operated with other European EMI assets to be divested as the Parlophone Label Group. In February 2013, Universal Music Group sold the Parlophone Label Group, including EMI Classics and Virgin Classics , to Warner Music Group . The European Union approved the deal on May, and Warner Music Group took control of the label on 1 July. It was then announced that the EMI Classics artist roster and catalogue would be absorbed into

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