It’s the dream of many music stars to be a big name artist with one of the major recording labels backing them, but what does that actually mean for the industry. The music industry is divided between the four major labels, controlling the majority of the industry’s money, and small, independent labels controlling the majority of the industry’s actual albums. At first glance, this concept looks like a type-o. How could the independent labels produce more music from more artists, but the four major labels, Universal Music Group, Sony Music, EMI, and the Warner Music Group, produce roughly 80% of the money in sales? The answer lies in the major label’s ability to market and reach large quantities of audiences compared to the smaller, independent labels with limited resources. “Major labels also have the advantage of having more money and better distribution networks than independent labels, which gives them a better ability to meet a demand for their product as they see it growing” (http://hs.riverdale.k12.or.us/~hfinnert/exhib_06/davidp/paper4.html). Because of their size and power, the four major labels also have reach into various other forms of media, including radio, TV, and news that they can use as channels to reach potential markets for distributing the music of the artists they represent. The major labels have strong control over the market, which limits the scope of music experiences and diversity. Also, “major labels have also been slow to utilize the marketing potential of the internet” (http://hs.riverdale.k12.or.us/~hfinnert/exhib_06/davidp/paper4.html). Both of these flaws are found less in independent labels, which are founded on diversity and networking.
The Six Keys of Major Labels in the Music Industry:
1. Product: Representation of artists in the music industry
2. Technology/Platform: Internet, radio, music recording
3. Industry: Music
4. Money: The major labels represent only about 44% of potential artists/music, but control 80% of the money in the industry, which creates an imbalance in the industry (as compared to independent labels).
5. Law/Government: Monopolization/control of industry may eventually come into play in the law sector.
6. Audience: Music is widespread across audiences. Different interests and likes/dislikes in the industry are less diversified in major label production. Less artists are represented by major labels, but more people hear major label produced work, because of their ability to reach larger audiences.
Major labels in the music industry can and do reach large audiences because of their size and power and control of money, but represent a much less diversity and base of artists than independent labels. In most industries though, money talks, so it will be interesting to see if more and more independent labels are absorbed by the four major labels as larger percentages of funds go to the major labels, or even if one of the major labels is absorbed by another. It will also be interesting to see if more money is found in major labels over time accompanied with an even larger decrease in artist representation, which will indicate an even slighter diversity in major label representation. Stay tuned…