There are four main types of Record Labels:
- Major record labels - dominate the market and consist of major distribution.
- Independent record labels - lack the ability of major distribution.
- Sub-labels and imprints - separate companies or divisions owned or distributed by the major labels.
- Speciality record labels - focus on non-mainstream material and use non-traditional distribution methods.
I have decided to research one major record label (Sony Music Entertainment) and one minor record label (Dualtone Records) in order to compare how they differ from each other.
Sony Music Entertainment (SME) is an American music corporation owned and operated by the Japanese conglomerate Sony Corporation. The enterprise was first founded in 1929 as the American Record Corporation. However, Sony Corporation of America brought the company in 1987 and renamed it as SME shortly after.
In 2010, Sony Music Entertainment generated a total revenue of $5.67 billion, making it the second largest of the 'Big Three' record labels - only being smaller than Universal Music Group. It has signed many famous artists, including Michael Jackson, JLS and Susan Boyle.
Sony has a particularly varying image; there is no consistent genre throughout their artists. However, one of the most prominent images is one formed by the sub-label, Syco Entertainment. This record label is a global joint venture between SME and Simon Cowell. This company also hosts televised talent shows around the world, including The X Factor and Got Talent. The most successful contestants are likely to be offered a record deal by Syco. Therefore, this generates a lot of publicity for SME because the audience follow a contestant's journey throughout the competition so may begin to enjoy listening to their music or simply want to support them through their experience. One of the best examples of a successful artist that has been discovered through Syco Entertainment is JLS.
JLS were particularly successful during the five years that they were active. They sold in excess of 10,000,000 records worldwide and earned a fortune of £24,000,000. This had a great impact upon SME because having such well-known stars promoted their record label and so the audience wanted to buy more music from the same record label.
Because SME is a major record label, it is well-financed, meaning that they have a better production, distribution and marketing process. It also means that the artists that they sign will be more talented, popular and possibly already well-known. Therefore, the major record labels such as SME make a large profit. This advantage played a key role in JLS' success - not only were they already well-known due to their X Factor journey, but SME were able to invest a large amount of money in them in order to assure that they generated the highest possible revenue.
Dualtone Records is an American-based independent record label specialising in folk, singer/songwriter, Americana and indie rock. The label was founded in 2001 by Scott Robinson and Dan Herrington. The label's albums are available globally through the means of digital downloading and physically through CDs. As Dualtone are a relatively small label, their financial information is difficult to find out. However, usually Dualtone has sales targets of selling 30,000 - 50,000 of each album; a miniature figure when considering JLS' total record sales exceeding 10,000,000.
Dualtone has signed 17 minor artists over the past 13 years; perhaps the most famous of which being The Lumineers, whose debut album has been certified Platinum in the US and Ireland, with Gold certifications in the UK, Australia and Canada. They have been nominated for awards globally.
This music video clearly follows the folk/indie rock style that Dualtone are so well-known for. This is one of the biggest advantages of owning an indie record label - because their music follows a particular genre, and targets a niche audience, the audience develop trust in the record label. Therefore, they are persuaded that they are going to like the new artists that Dualtone sign before they have even heard them. This brand loyalty was probably one of the key elements to The Lumineer's success. Also, indie labels such as Dualtone do not have to undertake long corporate approval processes, meaning that they were able to sign and distribute The Lumineers' album more quickly.
Overall, both Major and Independent record labels have their own advantages and disadvantages. Major labels such as SME invest a high amount of money in their artists and aim for worldwide domination. However, Independent labels like Dualtone invest a smaller amount of money in their artists and yet still generate a worthwhile profit thanks to their niche audience.