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 How Record Labels
are Set Up
by Christopher Knab ,
June 2011
Back to The Academy
There is a lot of work involved with running a record label: signing,
recording, promoting, publicizing, and selling music. The following
introduction to the way major labels and independent labels set up the
business of music marketing is broken down by departments. As you will
see, the larger record labels have the luxury of having many different
departments and dozens of employees to carry out the many
responsibilities involved in running a label. And, the smaller
companies, that have the same work to do, have to be quite creative and
energetic to get all that work done.
Major Label Departments:
What are the key departments at a record label, and what are those departments responsible for? Let’s take a look.
For
starters, the CEO of a major label will generally oversee the business
affairs of all the affiliated labels under their corporate umbrella.
Each major label will have its own President who is responsible for all
the label activities. For example, at Warner Brothers, there is a
president for Warner Brothers Records, a president for Reprise Records, a
president of Atlantic Records, etc.
Every department at a major label is usually run by a Senior Vice President, in charge of one of the following:
The Business Affairs Department takes care of label finances; bookkeeping, payroll, et al.
The Legal Department handles all contractual issues and other legal responsibilities.
The
A&R (Artists and Repertoire) Department locates and signs new
talent. They work with the artist in song selection, choice of
producers, recording studio selection and they communicate with the
label’s Business Affairs Department to make sure all the paperwork and
accounting issues involved with the actual recording of an act’s record
are setup properly. In short, The A&R Department can serve as a
liaison between an artist and all the other departments at the label.
The
Art Department supervises all product design jobs, (CD, Tape, Vinyl
cover art etc), trade and consumer press advertising, retail sales
posters and flats, and other needs of the print media.
The Marketing
Department is responsible for creating the overall marketing plan for
every record the label is releasing. They are also involved in
coordinating all the promotion, publicity, and sales campaigns that the
label is committed to.
The Publicity Department arranges for any
feature stories, interviews, or record reviews in local and national
newspapers, magazines, web-zines, as well as the broadcast opportunities
for such coverage on radio stations and television. They may also
co-ordinate any of these publicity opportunities with an artist’s own
Publicist.
The New Media Department produces and promotes the music
videos for the label’s artists that are shown on MTV, VHl, etc. This
department also oversees some promotions and marketing opportunities on
the Internet that use the audio and video technologies available from
online hardware and software sites that support music..
The Artist
Development Department usually oversees the career planning of artists
signed to the label. This department coordinates a consistent marketing
and promotion presence for an artist throughout their career with the
record label. The Artist Development Department has changed over the
last decade. Many labels no longer have such a department. Others have
changed the name to Product Development and concentrate more on
“breaking,” or promoting artists quickly in order to try to speed up the
return on their financial investment. The pressure to return a profit
to shareholders has changed the face of the music business dramatically
in recent years, so the emphasis has been more on Product Development,
and securing a hit as fast as possible.
The Sales Department
oversees all the retail activities of the label, and concentrates on
building relationships with the key record store chains and other
mass-market retailers. The Sales staff coordinate their efforts with the
major label’s distribution company, as well as communicating regularly
with the Promotion and Publicity departments at the label.
The Label
Liaison is the person who coordinates the business of the major label’s
distribution company with the needs of their parent record labels.
Street dates, (the date that a new release goes on sale at music
retailers), must be approved by the label’s distribution company
The
Promotion Department’s primary goal is secure radio airplay for their
company’s new releases. Their ability to get songs played on the radio
is central to the success of the whole company. The Promotion department
is closely connected to and constantly communicating with other
departments within the label to make sure that all strategies being used
to market and sell an artist’s record are working together properly.
Soliciting videos to MTV, VH1, BET and other music oriented television
networks and programs may also be the responsibility of this department.
At some labels this job is a separate department, or part of the New
Media department.
Every department at a record label plays an
essential role in the success or failure of the company. They are team
members, working together toward the goal of selling their records,
cassettes and CDs as one lean, mean machine.
Inside an Independent Record Label
Independent
record labels come in all sizes and shapes. The large, well-funded
indie labels are organized by departments much like the major label
operations described above. The more money a label has the more they
people they can hire to handle the various responsibilities of a label.
Smaller, grass roots or garage labels organize the work of promoting,
selling and publicizing their releases by wearing as many different hats
as they can. These smaller labels have an awesome task marketing their
records because there may be only two or three employees, including the
label owner, doing the A&R scouting, calling radio stations about
airplay, working with a distributor (if they even have one), checking
with the music retailers, and coordinating the publicity efforts, as
well as dealing directly with their artists and bands helping them find
gigs and put tours together.
Running a record label is a very
expensive and time-consuming job. One of reasons so few independent
labels succeed is related to the issues I have just outlined. It takes a
lot of money, and a lot of time to operate a legitimate record label.
The more research and planning a young label does before jumping into
the world of music marketing, the higher the likelihood that they will
survive, and perhaps even prosper in a very competitive business.
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Christopher Knab is an independent music business consultant based in Seattle, Washington. He
is available for private consultations on promoting and marketing independent music, and can be reached by email at: chris@chrisknab.net
Chris Knab's book, 'Music Is Your Business'
is available from the Music Biz Academy bookstore.
Visit the FourFront Media and
Music website for more information on the business of music from
Christopher Knab.
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