MUSIC BUSINESS RESOURCES FROM CMU
The Record Industry
The record industry is the strand of the wider music industry that works with frontline artists on creating, releasing, distributing and marketing recorded music, and managing and monetising sound recording copyrights.
RECORD LABELS
The artist’s primary business partner when it comes to recorded music is traditionally the record label. It’s the label that organises the recording sessions, gets the recorded music to market, and runs the marketing around each new record release.
The label then controls – and may own – the recording copyrights that are created, monetises those rights through licensing deals and possibly selling physical discs, and shares any resulting money with the artist by paying them royalties.
Although the label is focused on the artist’s recorded music, the work of the label actually has a wider impact, especially for newer artists.
By running marketing campaigns around each new release, the label also raises the artist’s profile and helps to grow their fanbase. This in turn boosts all the artist’s other revenue streams, like publishing, merch, touring, brand deals and so on.
RECORD DEALS
Labels didn’t traditionally get involved in those other revenue streams, even though they helped to boost them. Instead the label secured its investment by taking control of the recording rights and often taking a majority share of recording revenues.
That said, in the 2000s, when the value of recorded music slumped as the industry initially shifted from discs to digital, some labels also secured a cut of – or involvement in – some of their artist’s other revenue streams too. And some labels still sign deals of that kind, especially when working with newer talent.
OTHER BUSINESS PARTNERS
Although labels usually take responsibility for the recording, distribution and marketing of each new release, they might actually outsource some or all of that work to other companies within the record industry, like recording studios, music distributors, marketing agencies and royalty management companies.
MUSIC DISTRIBUTORS
The role of the music distributor in particular has changed over the years. Traditionally distributors helped labels get their physical discs to retailers. In the digital domain, they help labels get their music onto all the different platforms.
Over the years many distributors have expanded the services they offer to include things like marketing, analytics, royalty processing and sync pitching.
Some distributors have also expanded their client bases so that they work directly with artists as well as labels. Some predominantly work with artists. As a result, artists now have a choice – they can either work with a traditional label, or basically set up their own single-artist label and hire the services of a distributor.
Because of this expansion of services and clients, some distributors may now refer to themselves as label services or artist services companies.
ARTIST OPTIONS
Most artists now begin by self-releasing their recordings through their own single-artist label working with a DIY distributor, which will provide basic digital distribution to any artist in return for a nominal upfront fee and/or a modest commission.
As the artist’s career progresses they may choose to work with a higher level distributor that offers more services, especially marketing. Or they can sign a more conventional record deal with a label. Many labels also now work with artists on a distribution basis, sometimes via specific distribution or services divisions.
COLLECTING SOCIETIES
The other key players in the record industry are those collecting societies focused on recording rights, which usually collect money when recordings are broadcast on radio and TV, and when recorded music is played in a pub, club, bar, cafe etc.
In these scenarios the performance or communication elements of the sound recording copyright are being exploited. Within the record industry, these are sometimes referred to together as the neighbouring rights.
Collecting societies are sometimes referred to as collective management organisations (CMOs), performing rights organisations (PROs) or music licensing companies. These are basically different ways of saying the same thing.
There are societies representing both labels and performers – including frontline artists and session musicians – who, under law, have a statutory right to payment at industry standard rates when recorded music is broadcast or played in public.
In the UK the collecting society PPL represents both labels and performers.
MAJORS + INDIES
A common distinction is made in the record industry between the major labels – which are those owned by the major music rights groups Universal Music, Sony Music and Warner Music – and the independents.
The indie sector is very diverse, with both big and small independent labels, as well as millions of DIY artists running their own single-artist labels.
RECORDED MUSIC REVENUES
Today the record industry makes most money by licensing free and premium music streaming services, and social media and user-generated content platforms that want to allow users to include music in the videos they upload.
However, the record industry has other revenue streams, including:
> the sale of discs and downloads.
> when recordings are synchronised into TV shows, movies, games and ads.
> the broadcast and public performance of recorded music.
CMU RESOURCES
| The CMU Explainer on Record Deals looks at the role of music distributors and record labels, and the different kinds of deals artists can now do around their recorded music. The Music Copyright Explained guide from CMU and the UK’s Intellectual Property Office provides a comprehensive beginner’s guide to how music copyright works – including the recording rights. Published in 2019, the Distribution Revolution report from CMU and the UK’s Association Of Independent Music looks at the evolution of digital music distribution, and offers advice on how to pick a distribution partner. |
EXTERNAL LINKS
BPI is the trade body for the UK record industry.
AIM is the trade body for the UK independent sector.
FAC is the organisation for frontline artists in the UK.
Musicians’ Union is the trade union for musicians in the UK.
ISM is an organisation for musicians in the UK.
MPG is the organisation for studio producers in the UK.
MMF is the trade body for artist, writer and producer managers in the UK.
PPL is the collecting society for the UK record industry.
IFPI is the global trade group for the record industry.
WIN is the global trade group for the independent sector.
IMPALA is the pan-European trade group for the independent sector.
SCAPR is a global grouping of performer collecting societies.
AEPO-ARTIS is a pan-European grouping of performer collecting societies.