Understanding the Pros and Cons of Label Record Deals

Musicians recording music
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Many musicians place scoring a major label record deal at the tops of their to-do lists. Having one of the large labels working on behalf of your music can be your ticket to the big time.

However, there are downsides to signing with a major label. When you're trying to decide whether your ideal home is with an independent label or a major label, keep the pros and cons in mind.

Pros

  • Larger promotional budgets

  • More connections

  • More clout and influence

  • Can do business in bulk

Cons

  • Resources spread among many acts

  • Staff turnover

  • Limited personal attention

  • Limited negotiating leverage

Pros

Even as technological innovations reshape the way people listen to music and purchase music, major labels still have a financial advantage over just about every indie label. Because they have higher revenue than smaller labels, they have more cash on hand to spend on promoting your record—which is exactly what you want. It also means they may be able to offer you a large advance and invest in better facilities and equipment for recording, touring, video shoots, and other opportunities.

Additionally, most major labels have been in the business for decades and have long established connections that help you reach your music career goals. For example, major labels have more clout when it comes to being able to market their acts to media companies that own radio stations across multiple markets. This affects airplay for songs in addition to opportunities to promote live shows or take part in live interviews on air.

Major labels can use their clout to get favorable deals with local media outlets. For example, access to a proven act might be dependent on also giving airtime or space in print to an up-and-coming act. This is beneficial for you if you are the up-and-coming act.

Bigger budgets and broader connections also help major labels get the best deals on manufacturing, advertising, and other expenses since they do business in bulk.

Cons

A lot of major labels sign multiple musicians and publish a lot of music just to see what will stick. As a new signing, except in very special circumstances, you're likely to find yourself fighting for attention. If your music doesn't start selling, you can find yourself with a record out that isn't getting much promotion and a label whose representatives don't return your phone calls.

Staff turnover at major labels can be high, and you may wake up one day to find out that the person who loved your music is no longer working at the label. If the new person is not a big fan of your music, your album is less likely to be a priority and might get forgotten about altogether.

A key man clause gives you an out if the point person you were working with at the record label ceases to be involved, but such bargaining power is against you when you sign a major label deal.

Many dedicated music lovers work on the major label side of the music industry. However, not everyone who works at major labels love music. You'll find a higher concentration of people who are in the business strictly for the money in major labels than you will at indie labels, and that sometimes ends up rubbing musicians the wrong way.