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The term record label may be difficult to define since it can actually refer to several different things. Furthermore, record label has to be viewed as an outdated term, since typically, recording artists no longer make records. They make CDS or recordings of their music that are downloaded. Initially, when records were the main means by which people listened to music or heard it played on the radio, the term record label made more sense, and in the most straightforward term, it referred to the label pasted on the center of the record that identified the company producing the record, the artists, and the title of the particular record.
When records were first recorded, they were often made by small and independent companies each with a name. Each company then represented a specific “brand” or trademark, and the label usually referenced a contractual relationship between certain artists, and a company. “Labels” worked hard to get their contracted artists airplay, which might in turn lead to people purchasing records. Labels profited, and so occasionally did artists, but they might instead be paid a flat fee for their recording.
Today there are still small independent companies that work with either one artist, and are generated by the artist, or that work with just a few artists. These independent labels frequently encounter difficulty when it comes to promotion and distribution of music, because they have nowhere near the presence or advertising budget of major music production companies. This is changing somewhat with the ability for any band to record their own music or videos and release them on the Internet either for free or for small fees. In some cases, band or artist self-promotion is seeing a rebirth because of this ability. Bands like OK Go have become famous worldwide without distribution or advertising by a major recording studio.
Typically, a record label tends to mean a brand of a specific recording studio. Some of these major studios include: Warner Music Group, EMI, and Sony. These studios and a few others control about 70% of all record labels. Each of these large studios may have small subdivided studios that work with certain kinds of artists. These may sometimes be called sublabels.
Sublabels work for the larger studios, but the actual larger studio still works to promote and advertise any record label it owns. Sometimes larger studios will also snap up an independent label that is constantly finding hit performers or producing terrific records. At other times, the larger recording company forms a contractual relationship with an independent label to aid in distribution and production for part of the profit.
The Warner Music Group, for instance, has about 50 record labels, either completely owned by the group or that have a contractual relationship with Warner. Each record label may have its own unique brand or type of music to record, and the amount of control Warner can exert over a single label largely depends on the terms of the contract.