Recording Labels Demystified

Recording studios in Sydney, Australia have a long history. They date back to the early 1930's. The first Australian studio was an Anglo-American-Australian group. A large company with plenty of resources, it dominated the industry for decades and owned many well-known labels.

A label, in the music industry, is essentially a brand. This brand name is the company's trademark and is used for marketing. Musicians depend on the label's executives to promote their albums, increase their fan base and their sales. Often, the label is the publisher as well, and is responsible for bringing the album to retailers. Labels are a very important part of the promotion campaign.

Major labels enjoy their recognized name and fame to further promote the artist's work. Smaller labels are either independent (also known as indie), or are part of a larger company (sub-labels). Large recording studios in Sydney usually own many different labels. They are large umbrella corporations which, in turn, are owned by huge international holding companies.

Usually, a label and a musician sign exclusive contracts. It wouldn't do for an artist to sign on with more than one label. The contract can be long or short-term, and usually specifies the responsibility of each party. Seasoned artists might provide the label with a professional demo made in his favourite studio. An already famous artist is more independent and already has his team of support personnel. A newer musician might require more assistance. The label company may help in choosing a studio, a producer, or even provide additional musicians. It becomes a real team where the label is involved in all phases of the process.

Teamwork is not always a smooth ride, especially if the members have different opinions. Often, the musician is focused on the music, the message of the lyrics, and is very reluctant to alter his work. Label companies, on the other hand, are focused on the acceptance and sales of an album. They may make changes that are not welcome by the artist because they believe it will sell better. Their goal is a commercial one, not an artistic one, and their vision may not be the same. This has caused friction in many instances, even with experienced artists.

Traditionally, a contract gave the label the rights to an album and the artist earned royalties. With the internet and the popularity of file-sharing, iTunes, YouTube and other direct to the consumer distribution methods, the contracts had to be altered. Music sales have decreased significantly. To counteract the loss of income, agreements have become broader. They give the label company expanded rights, not only to the songs but also to sales of merchandise, touring profits, and any other income produced by the album. In exchange, the artist is given a larger advance and higher royalties on the income from sales of CDs.

If you're unsure about signing a contract, we recommend that you consult with an entertainment lawyer. This can avoid lots of headaches, loss of income, and even failure.