What have the labels ever done for us?

Welcome to the weekly article looking at the current music industry, its challenges and overall why and how SHOUT4's RevShare model works so well for the independent music industry. Written by SHOUT4 Chairman, Ric Yerbury.

Definitely showing my age as I plunder old Monty Python sketches for the title of this article

I mentioned before heading off into the outer world for a holiday that I would be considering the possible demise of the record label as we have known it. A good question I was immediately asked by a few of the followers of my ramblings. So what has caused me to ask this?

Well quite a few things to be honest. But perhaps I should amend the question to “What can the labels do for me now?” It would be churlish in the extreme to deny the role of the many record labels around the world in corralling the talent of generations to deliver music ingrained in the lives of many. However that was then and this is now. Today we have a world which consumes so much of its music without direct physical intervention. I mean look in your latest shiny motor, where is the CD let alone the 8 track or cassette player? No, you connect via bluetooth, Appleplay or whatever. I can knock out a rapid tune on any instrument I have to hand, commend it to some handy software and upload it to the swedish champions of streaming without recourse to so much as an assistant to the assistant A&R scout. 

So let’s break down the label’s role a bit. I am not really talking about the kit build of a pop star that the Simon Cowells of the industry seem to prefer. Pop by numbers is a real skill and as an artist if you choose this route, it comes with a price tag. (Doesn’t exclude the potential for unreasonable exploitation of the artist if not careful!). 

A&R

A&R forms a key part in the artist’s journey with a label although this is not an exclusive service or skill and very often the manager is better placed to work with the artist on this. Artists can definitely benefit from insight, feedback and constructive support with refining their art. What they don’t need is someone taking an artist away from the genre or performance style that is natural to them to only manufacture a copycat format. Really tricky balance between increasing commercial appeal and making the edges of the artist so smoothed off that they lose the very thing that made us prick up our ears. The right manager can certainly be part of this and so can the right producer but fundamentally we should trust the true artist to find their way. So a label can provide this service but they are not the only ones who can

Marketing

Without a shadow of doubt, the label can offer real impetus to a release with the right campaign management, particularly if we are talking about the major labels and larger indies. However you can buy these services if you know where to go. I was speaking to a leading artist manager the other day with a couple of global acts who are coming out of contract and he made exactly this point. Of course we should not underestimate the clout that the big three music companies have in getting the attention of the gatekeepers

Brand

In the very dim and distant past, the label name was something that really mattered to a wide part of the public. I bought everything on the original Charisma label under the misplaced belief, everyone was a winner. Ditto more recently Rough Trade, then Chess Club. Then again music was everything in my life. There is little value now in the brands of labels except to those inside the fence. We love all the cool new names but we are not the wider public here. So being signed to a particular label matters little to the Insta Spotify follower 

Distribution

The major labels offer full distribution in whatever territories their agreements are for and of course full aggregation to the DSPs. However the world has changed with digital distribution and the onset of the likes of CD baby and Distrokid is exploiting the relative ease in which content can be placed on all the platforms. I am less convinced by the claims that the labels have special relationships with those platforms that justify the deals they offer. Again you can access people that may and do have those relationships. It has to be said though that the platforms are increasingly data dependent and rather than people weighted. 

Funding

Ah here it is, money! That is what the major labels do really well. A huge cheque, big limo and jets on hand. Well it is perfectly true that they have access to a lot of cash. But as my mother always said to me, no such thing as a free pile of cash or was it lunch? Quite rightly these are very well run financial businesses which need to see a significant return on investment. Risk capital is part of this and in common with the old venture capital models, you place a lot of bets but try to stack the cards in your favour to ensure a decent ROI. With artists this is tricky as not many succeed in terms of those criteria, hence the large majority of artists being dropped early

So where does this leave us? 

I have sat on both sides of the desk as an artist and as a label owner. I have been the manager trying to get the artist a ‘record deal’. So I do understand the allure of that deal. However I have to question what exactly a record label offers the new generation of artists in return for an assignment of their rights and the often inequitable carving out of the revenues  generated.

Artists in most cases need a lot of help to break open a career in this highly competitive world. Having determined the shopping list of services, they need to consider how can this best be fulfilled

What is the future role of the record label?

First and foremost the label of today should be seen as a service company providing a range of services to support the growth of an artist. Those services should be anchored by the artist or their manager if possible, not the label. I realise this changes the role somewhat of the manager but as I said I am seeing managers already taking that on board a wider spectrum of responsibilities. 

Before people think I am suggesting all the many talented workers at the record labels are redundant, think again. Their skills are needed, however, within service companies where they can continue to be a key element of this process and offer much. 

I am still concerned about the culture of excessive cash being spent too early on an artist which is then added to a never ending recoup balance. While there is nothing to stop the labels as service companies advancing funds, there needs to be greater consideration as to the risk reward.

You will not be surprised to hear that my view remains that the legal and financial relationship for providing these services should be within a RevShare deal such as is offered through SHOUT4 . Bringing down upfront costs while rewarding those that have helped an artist achieve success is essential to establish sustainable careers
That’s enough for now. Until next time when we might consider whether “The rich have got their channels in the bedrooms of the poor”

Ric Yerbury

Ric has a background in music as an artist, manager, label owner and promoter. He has combined this with a career away from music as CEO within SMEs and PLCs. As the architect of SHOUT4's Revshare model he is a strong advocate for artists retaining rights and providing legal and financial solutions to the DIY market which reflect the way the world is now and not the past.

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