The Truth Behind Record Deals & Real Music Success

Music Business Myth Busters - Episode 4: You Need To Get Signed To A Record Label To Be Succesful

98% of independent musicians that do this think it's their surefire ticket to fame and fortune in the music business. They sell their souls only to be enslaved, exploited, ripped off, rejected, and even robbed of their music.

They're a victim of today's myth: You need to get signed to a record label to have a successful music career.

This is yet another myth that so many musicians have been seduced by that holds them back from getting their music out there, building a dedicated fanbase, and making a sustainable income from their music. It's a vestige of an obsolete model of success in the music business that no longer has any legitimacy.

What is a record label actually going to do for you? The assumption is that they're going to do all the work to make you rich and famous and you can just write, record and perform music.

Money plays a huge part in why most musicians want to get signed by a record label because they have a bigger budget than you do. Money can't buy success, but it does allow you to speed up the process. You can pay for better training. You don't have to wait to put out merch or product that's going to generate revenue. Touring is expensive. Merch is expensive. Albums are expensive. There are ways around that, but you can only cut corners so much before you sacrifice quality and can tell it was done on the cheap.

Without financial support from a label, we have to do everything out of pocket. In the past, this put the brakes on many independent artists' careers because we had to scrounge around to find the money. But we now have crowdfunding platforms like Kickstarter and Indiegogo and patronage models like Patreon. You can use print-on-demand services for merch so you don't have that huge initial expense.

Record labels really don't have a business model as such. Usually, record execs would jump on a trend, something that aligned with what they thought was going to sell, and then throw millions of dollars at it to see if it sticks. You need millions of dollars for this kind of mass media approach to put your music in front of enough ears and eyes. It's all about sheer volume. Sometimes this music isn't even that good, but through the blunt force trauma of constant exposure people become familiar with it and it grows on them.

The difference between record labels and independent musicians is like the difference between a shotgun and a scalpel. Labels use a shotgun approach that's scattershot and random. It tries to win fans by blanket coverage which costs millions of dollars. As independent artists, we don't have the luxury of millions of dollars. We have to be smarter, more strategic, and more surgical. We're using a much more precise method of targeting fans that allows us to do it at a tiny fraction of the cost of the labels.

In the real world, businesses don't run by indiscriminately throwing money at something. You find a market, you figure out what it wants, you spend money, and you focus on getting that ROI. If the ROI isn't there, you refine the business or close up shop.

When it doesn't work out with a label, you're fired. It's game over. But as an independent musician, you're an entrepreneur. You have more flexibility. If you have 1000 customers, you're set. You don't have to listen to what anyone says and you can do whatever you want as long as you're servicing those 1000 customers.

But most musicians aren't thinking in this way. They're thinking when they get a label deal, they've got it made. The downside is that you have to do everything the label wants you to do. You're now on a leash. When you're servicing 1000 customers, you're spreading your risk. Maybe one of them has a bad experience and leaves, but the other 999 won't. If you do the wrong thing by your label, then you're screwed. No one's going to pick you up after a label drops you.

I'm going to address fame in-depth in another video, but suffice to say you need to change your mindset around being world-famous. That's a byproduct of the old music business model where a label blasts you at as many people as they can.

In the past, access to music was very tightly controlled by the major labels. They controlled everything we heard. They would release songs to be played on the radio or you would have to go and buy a CD. Their whole business model was based on extracting maximum profit from this artificial scarcity that they created. Then the internet came along and eliminated scarcity and undermined their business model because abundance and scarcity can't co-exist. Abundance is the enemy of the record labels. There's more music being made by more musicians and consumed by more people than ever before. Media has become more fragmented and it's getting harder to dominate every media channel or platform. The music industry is becoming more decentralised.

One example is radio. Record labels control what you hear on the radio. Radio was important 20, 30, 40, 50 years ago when it was the main channel for music consumption, but it doesn't have the stranglehold it used to. Phones are the new radio. Your job should be to get your music on as many phones as possible. You're now a media mogul. You've got your own TV station, your own radio station, your own PR firm, your own bank, the ability to record your music. Everything you need to run your music business is on your phone. You don't need support from a label with the tools and resources we now have available.

I see record companies as being like the fossil fuel industry. They're becoming less relevant, less influential, less powerful, and on the brink of extinction. As a result, there's been massive consolidation of record labels. There are now only the big 3: Sony BMG, Universal Music Group, and Warner Music Group.

Last week I talked about the myth that you'll be discovered. Labels no longer pluck artists out of obscurity and drop them into the fame machine. These days you have to show some track record of success building a fanbase and selling music before a label is even willing to talk to you. So you can't avoid marketing and business and building a fanbase if you want to get signed because that's how you're going to get the labels' attention in the first place. If you get a buzz going, then the labels will want to have a relationship with you. At that point, if you do approach a label it's a very different conversation. You're in a better bargaining position because you've got more leverage. You no longer need a label because you can reach your dream of making music full-time without one. Now you're a partner rather than an employee.

In my opinion, your goal should not be to get signed. 98% of artists that get signed to major labels fail. They don't recoup the cost of their advance and they get dropped. And here's the kicker: once they get dropped, the label still owns the rights to the artist's music and their master recordings. And legally you can't re-record those songs you wrote while you were under contract.

Getting signed to a record label is not the gift from God that you might imagine it is. There's horror story after horror story about the countless artists who were exploited and ripped off and had their careers and lives destroyed by record labels over the last century. They were never properly paid their royalties or were denied ownership of the songs they created.

Now that sales have been declining for so many years, labels have gotten so desperate to find new ways to make money that they're striking “360 deals” with artists. With these deals, the label gets a piece of your entire career: your recorded music, your touring revenue, your merchandise, and your sponsorships. Their justification is that they helped make you a star and so they deserve a cut of everything you get, not just revenue generated from your recordings. The problem is that the label is dipping into so many areas of your career that you'll be left with nothing for yourself.

When you're signed to a label, you can't do a lot of the things that you have the freedom to do as an independent artist. You can't put out music and videos whenever you want. Remember the huge shit fight Prince had with his record label in the 90s? Prince wanted to put out new music whenever he wanted to but Warner Brothers wouldn't let him. He also wanted to own his master recordings. He felt so stifled by his record deal that he changed his name to that unpronounceable symbol to try to void his contract and also appeared numerous times in public with the word “slave” written on his face as a protest.

Another reason you might not want to get signed is creative differences. Labels don't see eye-to-eye with artists on their music. In the mid-1980s, Leonard Cohen's American record label refused to release Hallelujah. It's since become Cohen's best-known song and a pop standard, even an anthem. Over 300 artists have covered it. The record label got it wrong. Can you imagine if the label had gotten their way and Hallelujah had never been released? We would have been denied this amazing song. How many millions of people wouldn't have been touched and had their lives changed by it? It's very rare that you get complete creative control over your music if you're signed to a label. You have to sell your soul and compromise your creative vision. Would you really want a label dictating what kind of music you can make or release?

What sucks about the old music industry model is that you have to rely on other people, you're totally at their mercy. This is the best time to be in the music business because you are in complete control. The internet has levelled the playing field. There are now a hundred different models for a successful music career. There is no one-size-fits-all approach. You don't have to get signed. Many artists are succeeding in the new music business without a label.

Chance the Rapper has reached stratospheric success without a label. He became the first unsigned artist to ever win a Grammy, the first unsigned artist to play SNL, and also the first unsigned artist to make it into the Billboard Hot 100 for a streaming-only album. There are many thousands more independent artists who you've never heard of who are making a comfortable, sustainable living from their music without being signed to a label.

The labels are intimidated by this because artists are saying “we don't need you anymore!” Musicians are now taking back control of their careers. We don't need labels. They're predatory and rapacious. You can now get direct access to your fans and consumers and bypass the middleman. Who cares if you don't have a record deal? When you're signed to a label, you're an employee at best, or a slave at worst, like Prince said. You don't have to sell your soul in this Faustian pact to have a successful music career. You don't need the stamp of approval from the gatekeepers. You don't have to wait for permission anymore. Your music career is in your own hands. You're the master of your own destiny.