How Much Do Record Labels Help Artists Find Success?

SOURCE: GQ

The economic principle I’m exploring is “People generally respond to incentives in predictable ways.”
My research question to help me study the economic principle is “How does the music industry incentive artists to make popular music?”
The article published in The Balance Careers titled “Understanding the Pros and Cons of Label Record Deals” demonstrates this economic principle by showing the advantages and disadvantages of signing to a successful record label as well as other methods that artists can use to find exposure or success.

First, to investigate how artists can find success, and if they need to conform to mainstream standards to do so, we need to acknowledge the primary goal of almost all young artists- getting signed to a record label. The main goal of most new artists is to find a record label that will sign them, meaning a label that will give them money to create and record their music, as well as help give them exposure to mass audiences. There are a lot of advantages of signing to a major record label such as Warner Music Group, EMI, and Sony Music Group. One of the biggest pros is that major labels have a “huge financial advantage” over lesser known labels or artists working on their own. This financial support is one of the key factors that determines an artists success because the more money a label has, the more money they can spend “promoting your record.” This is incredibly important because without exposure to mass groups of people, it makes no difference how good you music is because now one will be listening.

 Additionally, this considerable funding that comes from large record labels can also provide more opportunities for things like “tours” and “video shoots.” Again, these things are essential to the success of a new artist as they give artists more exposure to new audiences. Finally, a huge advantage to signing to a major label is being able to take advantage of “long established connections” in the music industry. These connections help artists find music video directors, to tour manager, and more. These things help new artists get a foot in the door in the industry and hopefully find success with their music.

Next, I believe it is also very important to recognize the downsides of signing to major record labels to understand why some artists may choose to sign to indie, or lesser known labels, or to just go unsigned. There is no doubt that compared to smaller labels, major record labels have a reputation of sacrificing creativity or originality for profit. This is a major downside to working with a major record label because it can cause artists to feel like they are just puppets for the record labels to make money off of. In fact, the high “staff turnover rates” as major labels can help to show how many people working on the business side of major labels are in it “strictly for the money.” This is upsetting to artists and music listeners alike because while most artists make music to send messages, share their emotions, or simply to entertain, the record labels that are backing them only care about one thing- money.

Also, a major downside to signing with a major record label is that these major labels often have several artists signed to them as one time. This means that new, less successful artists could be fighting harder for attention or funds than seasoned vets. This can be harmful because it could cause artists to make music that they believe will be profitable for their record label in order to get more attention from the people that are backing them rather than making music that they might want to make. Major record labels tend to “throw out a lot of music, just to see what will stick”, which is again very harmful for artists and music listeners. When it comes to major labels, their main concern with producing music is usually quantity, not quality. These disadvantages are really important for artists to consider when deciding to sign with a record label and is why many new artists are choosing not to sign to any record labels at all.

In conclusion, although unconventional, many new artists today have been finding success in their music without the help of any record label at all. Traditionally, artists needed the help of a record label to get money to pay for recording sessions on top of exposure such as record distribution and touring. Today, however thanks to the creation of services such as SoundCloud, artists can “get creative” and basically distribute their own music. Although it can be tough for most artists to really break through using services like these, some artists such as Chance the Rapper have found success without the help of any record label. In fact, in Chance the Rapper’s song “No Problem” he raps about how “if one more label [tries] to stop [him]” he will be pretty upset as many labels are eager to sign Chance because of his mega-star potential and previous success. I think it is inspiring to new, up-and-coming artists that you can find success in the music industry without the help of a record label. I think it is inspiring because while there are exceptions, I feel like most record labels only care about making more money, and don’t care so much about the music their artists are creating. With more artists becoming successful without the help of labels, it will allow music to remain a true form of expression and not simply another way for corporations to make an extra buck.

In my next blog post I will research the question: Is there an opportunity cost for artists when they are encouraged to create music based on how well it will sell? If so what is that opportunity cost and/or tradeoffs?