All You Need to Know About the Music Business: 10th Edition

Because your genre limits your potential audience, you’ll often make more money by doing it yourself than you would if you signed to a record company. For a record deal to make sense, the company has to generate more money for you (after they take their piece) than you would get by going it on your own. With niche artists, that’s often questionable

Finally, we come to Distribution. The major record companies’ records are all distributed by major distributors, which are gigantic distribution networks that are owned by the major labels’ parent companies. These distributors coordinate digital distribution and move physical records from manufacturing plants into the stores. They also report strea

build a fan base, and market to them. Since your music has a wide appeal, if you break through, you’ll make far more money by keeping the record company’s share of the pie, not to mention keeping all of your non-record income.

In other words, if the company gets $100 from your recordings, and you have a 10% royalty, you get $10.

There are three major record companies in the world today, and each owns a set of labels. They are Universal (Interscope, Republic, Capitol, etc.), Sony (Columbia, RCA, Epic, etc.), and Warner (Atlantic, Warner, Elektra, etc.). In addition to these mainstream labels, all three of the majors own “independent” distribution companies (more about those

On top of all this, the artist would have to put up the money to manufacture the records. And if the stores didn’t sell them, they’d be returned to the artist, who’d lose the manufacturing costs, plus the freight costs in both directions.

As we discussed on page 15, a direct relationship with fans is the next generation of marketing, and young artists are proving savvier in this area than a lot of established companies.

When your music is available, it doesn’t help much if no one knows about it.

Strange as it sounds, most of the big independent distributors are owned by the same companies that own the major labels. Specifically, RED and the Orchard are owned by Sony; Caroline is owned by Universal; and ADA is owned by Warner.