Independent vs Major Record Labels

What the rise of independent artists will do to the music industry

The beginning of 2020 has forecasted some insights that every aspiring and upcoming rapper should be aware of for the future of music industry.

The independent record labels are at a rise yet again since the decline in 2017 from 39.9% down to 33.8% in 2018.  Last year in 2019 the independent record label increased their market share in the music industry to 35.1%. At the same time, major labels have also increased their market share for the past 5 years.

So, what does this mean for the future of music and the money that comes with it?

One thing everyone can agree on is that music revenue is taking on new heights with streaming. Streaming now accounts for 80% of music revenue in the industry.

This can be an alarming sign for record labels who make millions from traditional practices of revenue for their artists. Now, the ability to distribute, market, and manage your music has never been easier.

It should be no surprise that the new and upcoming artists are taking their music career into their own hands. Why wouldn’t you want to do everything yourself and keep all the money that comes from your efforts? Well, it turns out there could be several reasons…

The Difference Between Independent Artists, Independent Labels and Major Record Labels

Knowing the difference between these terms is crucial to deciding what route you want to take as a hip-hop artist. The main difference between independent artists, independent record labels and major record labels is the amount of work dedicated for each aspect your music.

For example, independent artists will endure much if not all the workload that comes with their music distribution, marketing, artwork, deadlines and more. Independent record labels take most of this load for you but will also require a percentage of all revenue created. Major record labels take all of the workload, leaving the you to solely focus on your creative content but in return they will take a much higher percentage of all revenue.

Which path is best? It depends on how you’d like to approach your musical career. Take a look at the infographic below to see the pros and cons of each.

Pros and Cons

Independent Artists

As stated above, independent artists are responsible for everything that comes with their music. This means they have to control the distribution, artwork, marketing, concerts, press, licensing, deadlines, merchandise and any other aspect with getting their music heard. Although this may seem like a lot of work, it is attainable for any aspiring or upcoming hip-hop artist. In return, the artist will be able to keep 100% of all profits.

Popularity around being an independent music artist exploded after many success stories flooding the media. Notable success stories for independent artists include Childish Gambino, Migos and their label Quality Control, Gucci Mane and his label 1017 Records, Young Thug, Tyler the Creator and his label Odd Future Records, Curren$y, Joey Badass, and Chance the Rapper.

Chance received a triple Grammy Award for his mixtape Coloring Book. History was made as it was the first streaming-only album to win a Grammy Award. These artists have shown the light to create your own success with proper planning and consistent action.

Independent Record Label

With a greater emphasis on the artist, independent record labels give artists a much larger percentage of revenues and alleviate most of the load for the artist. Independent labels generally have a smaller network and less budget, but they hold key information and processes that most upcoming artists are not aware of. Independent labels also give artists more time to the creative process than major record labels and are more flexible on revenue split.     

Reputable independent rap record labels include Top Dawg Entertainment, Stones Throw Records, Fool’s Gold, Entertainment One Music, and Babygrande Records. Most of these labels have been in business for well over 10 years and scored big name artists in their roster. Handing the workload over to them might be a good move for anyone who solely wants to work on their craft and not have to worry about the logistics of the marketing etc.

Sometimes we have to realize that other people are far more trained in areas than ourselves and so giving others a slice of the pie is well worth sharing.

Major Record Label

Still the most popular option in 2020, major record labels remain having great power and authority in the Hip-Hop community. Major record labels have many advantages over other labels due to a massive network and limitless budgets for artists and their look of fame. Major record labels take over all aspects in music distribution, marketing, press and much more opportunities are at hand. Though, this comes at a price that is usually non-negotiable and can range from 15-20% in all revenue in addition to stricter rules in content.

Powerhouse record labels include Def Jam who is by far leading the successful major rap labels by artists’ performance. Young Money, Roc-A-Fella, Jive, and Bad Boy are at similar levels of performance. Competition continues to be strong in this space and recent analysis confirm that major record labels sign on average of 50 new artists a month. That’s quite a lot compared to the number of artists in each of the rosters in independent record labels.

Knowing this might discourage any new and upcoming artist who are dreaming of being signed to a major label, but you must know that building your image and online presence is often a big factor in scouting talent. It is well worth investing into yourself and your growth before trying to send any projects to these major record labels.

Personally, I think new or upcoming hip hop artists would be better off remaining independent for as long as they need, to build traction and learn every aspect in the music industry. Get your feet wet with marketing, press relations, and engagements to start. Have an organized plan for growth in all avenues. Yes, this will be a lot of work but if you really love what you are doing then you will find these different techniques fun to progress in. Once these skills are developed