Rappers Should Never Sign To A Label?

The Truth About The Music Industry

All the major labels are in survival mode due to the growing D.I.Y Artists. Music services like Spotify and DistroKid have made it possible to release music and build a fanbase without a record deal. To put it simply, independent artists could take over the global market. The reason major labels like Sony are still the global leaders is because they sign a lot of artists every year.  If they were to slow down at their current rate, independent artists would dominate the market.

According to RollingStone, in 2017 major labels signed a total of 658 new artists. They signed 2 new artists everyday on average, spending $11 million every 24 hours. Last year CitiGroup’s financial report showed artists only made 12% of all the money generated in 2017. Labels have a clear understanding that in order to own the global music market, they need to sign new artists frequently. We can only speculate more artists have been signed in 2018 and 2019.

Just imagine all the music being uploaded to streaming services by artists around the world. Its no longer necessary to sign with a label if artists can establish their own fanbase. Platforms like Facebook, Instagram, and Youtube have given the modern day artists the ability to build their fanbase without needing outside investments.

Its not always a bad thing

It can be beneficial to sign with a label, if you need additional support. Major Labels have create a machine. They have  the tools to produce the necessary content in order to maximize their profits. They’ve transformed into a full digital entertainment machine. Labels are also signing new artists for shorter contract terms and will bigger advances. Depending on the artist’s projection and leverage, labels are offering partnerships over the standard deal.

As mentioned in our previous post, major labels are applying the “Law of Large Numbers”. TheY are betting on a large pool of music, instead of investing into a handful of artists. Labels are also profiting off everything from Legal settlements, broadcasting, and “black box” payments. Music is like stock, its a digital asset  and labels own majority.

Check out the RollingStone Article – “Are The Major Record Companies Signing Too Many Artists”

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