Traditional Record Label deal with in-house distribution experts
Pros
Reputation and influence: Many record labels, especially major labels have well-established influence and connections in the music industry. They are better positioned to secure licensing and publishing deals, shows at larger venues and festivals, media coverage, radio plays, and other opportunities and also manage hard copy (Vinyl, CDs) production and distribution of your music.
Existing network and connections: One significant benefit of signing with a label is their existing network. It can present major opportunities for you and your music. Without a label, your network and reach to larger audiences can be limited. Established labels will have a larger fanbase. They may also have relationships with booking agents, music venues, publishing companies, PR companies, and other music industry professionals.
Available resources and budget: Established record labels have the resources and funding to provide support for mastering, distribution, album artwork creation, marketing, merchandise, touring, music videos, and other expenses. However, the budget and resources available depend on the label.
Implemented marketing strategy: Signing with a record label with a robust marketing strategy will increase your music sales, help you reach new fans, and boost your music career. Also, a label may have a large email list, regularly send newsletters, have a strong social media presence, music media support, and more. In addition, a label will have music industry experience.
Cons
Less personal attention: Resources of a record label are spread among many acts so a more limited personal attention from the label and often high staff turnover.
Limited creative control: Signing with a record label gives them control over your music. The label can make deals and decisions with your music without your approval. They also have full control over distribution, marketing, artwork, messaging, and more. However, the control over your music and brand depends on the terms set in the contract.
Transfer of copyright ownership: The record label owns the master rights to your music when you sign a deal. They have the freedom to negotiate music licensing and publishing deals without your approval. As a result, they can keep more profits generated from these deals.
Fewer profits: Records labels take a percentage of the profits generated from music sales, streams, licensing deals, and other revenue sources. Also, some labels use the royalties generated from music sales to pay for mastering, promotional mailers, and other expenses associated with the release.
Bad contract deals: Many independent record labels have artist-friendly contracts. However, major record labels are known to have contract deals that give the artist a lesser percentage of royalties. Also, signing with a label means you have to deal with these complicated contracts and expensive layers if needed. This means limited negotiating leverage for the artist.
Digital online distribution agents like cdbaby, distrokid
Pros
Will help independent artists without taking too much profit. When your album is sold online you will only have to share a small percentage with an online music distributor, but the cut you have to funnel to them will almost always be less than paying a physical distributor and a brick and mortar shop.
Online music services offered to independent musicians: Digital distribution companies can now deliver their music to digital music stores, music platforms, and streaming services without the need for the artist to have a record label behind them.
They do the leg work: Digital distribution companies understand how technology can be used to distribute music. They can respond to the algorithms and read the data accordingly so they can mastermind a campaign to maximise downloads or streams.
Relatively cheap: Digital Distribution companies require some recompense for their services but in general the deals are now heavily weighted in the artist’s favour.
Cons
Will take some of the money: Online digital distribution companies will require a certain percentage of the profit and sales made but this is historically much, much less than the record labels although it does mean the artist does not retain %100 control.
Which one?: Many of the digital distribution companies offer different deals which means independent artists may have to do a lot of research to find the deal that suits them best and they may get it wrong.
Totally independent/DIY artist
Pros
You can keep prices friendly. One common complaint cited by music fans about CDs/Vinyls is that the prices are sky high. Because DIY artists don’t have to share so much of the earnings and because they don’t have to consult with a distributor/shop to set the prices, they can make their album price buyer friendly.
100% ownership of your music: Independent artists own the master rights to their music. They also have the freedom to negotiate music licensing and publishing deals. Moreover, they don’t have to worry about confusing contracts, expensive lawyers, and signing over their music rights.
Keep 100% of the profits: DIY artists keep 100% of the profits generated from music sales, streams, licensing deals, merchandise, and other revenue sources.
100% creative control: Independent artists have complete control over the direction of their music. They also have full control over distribution, marketing, artwork, messaging, deadlines, and more. Moreover, an independent artist has free will to make decisions about their creative vision. It’s the ideal scenario for many artists.
It keeps the costs down. When DIY release an album online, you don’t have to pay for pressing or artwork printing, which makes up the bulk of the costs associated with releasing a record (after the recording, of course). All you need for a digital release is a website set up that is able to handle the download demands for your album.
It’s fast and easy. When they release a physical album, they have to deal with designers (who are always late), manufacturers (who are always late), distributors (who always seem to want to push back your release date for one reason or another) and so on. Independent artists need a long lead time to make sure everything falls into place the way they want it to, and a lot of patience to deal with things when they invariably don’t. With a digital album, releasing the tracks can be as easy and fast as point and click.
Cons
Competition is thick. “Competition is fierce” is the cliche, but competition is thick is a better way of describing what is out there on the internet. How the net bears up under the strain of the glut of bad music it contains is a mystery, but even if a DIY artist has the best songs in the world, they still have to get people to find them among the hundreds of thousands of websites hosted by people whose HTML is better than their songwriting.
Limited resources and budget: Funding mastering, distribution, marketing, merchandise, touring, and other expenses are expensive. Many independent artists don’t have the resources and money a record label can provide.
Limited time: Pursuing the independent artist route is time-consuming. Self-releasing music can seem like a full-time job. It requires a lot of time to set up distribution, create all the release assets, develop a marketing strategy, track sales, book shows, and everything else associated with releasing music. All this extra work also takes away valuable studio time.
Limited music business experience: Learning the ropes of the music business is challenging as a DIY artist. It takes time and experience to learn all aspects of the music business. There are a lot of parts to manage, changing trends, music laws, and much more. It’s a complex world! It can also be an expensive lesson to figure out what works and what doesn’t.
There are less people working to sell your music. When there is physical distribution, you have people actively working to sell your music to shops, who actively work to sell your music to people. This is all in addition to any press and radio they might have going. On the net, independent artists are flying blind and all alone.
Limited network: DIY artists starting their music career have a limited network of fans and industry contacts. Whereas record labels will have a larger fanbase and connections with music industry professionals such as promoters, booking agents, media, etc.
Promotion is a nightmare. Some of the larger music publications still show some resistance to covering online-only or a new artist in particular. Yes, a band like Radiohead can drum up a lot of press coverage when they release an album online, but they already have a lot of cache in the bank. Finding a good web promotion company can be tough, and promoting something on the net is hard work.
Significance
In conclusion it’s clear that each option has its own advantages and disadvantages depending on the approach you choose to take as an artist. When working completely independently gives a massive amount of freedom and creative control, this comes at the cost of requiring a lot more time, effort and commitment to be put into a project. Whereas if choosing to sign to a record label a lot of this work is taken off of you so you can focus on actually creating the music, this however is at the substantial cost of needing to pay back the people who work on distributing your work, causing a significant decrease in your profits from releasing music. In some ways this could raise the use of online distribution companies as a comfortable middle ground, as they still allow a lot of creative freedom without as much cost for releases, however this option also has its own flaws, with many different companies on offer in a competitive market it can be difficult to narrow it down to the best one for you, especially with such a wide range of techniques and payments. Overall, this shows that it is very important that an artist looking to release music considers all these options and how they apply to their own requirements, as each artist is different and has a different amount of time and funds available to them.