Record labels may be small, localized and "independent" ("indie"), or they may be part of a large international media group, or somewhere in between.
Record labels are often under the control of a corporate umbrella organization called a "music group".
Record labels and music publishers that are not under the control of the big three are generally considered to be independent (indie), even if they are large corporations with complex structures.
Though they may have less sales power, indie labels typically offer larger artist royalty with a 50% profit-share agreement, aka 50–50 deal, not uncommon.
[8] In addition, independent labels are often artist-owned (although not always), with a stated intent often being to control the quality of the artist's output.
However, frequently independent artists manage a return by recording for a much smaller production cost of a typical big label release.
This often gives the combined advantage of name recognition and more control over one's music along with a larger portion of royalty profits.
Historically, companies started in this manner have been re-absorbed into the major labels (two examples are American singer Frank Sinatra's Reprise Records, which has been owned by Warner Music Group for some time now, and musician Herb Alpert's A&M Records, now owned by Universal Music Group).
A label used as a trademark or brand and not a company is called an imprint, a term used for a similar concept in publishing.
[9] Music collectors often use the term sublabel to refer to either an imprint or a subordinate label company (such as those within a group).
Established, successful artists tend to be able to renegotiate their contracts to get terms more favorable to them, but Prince's much-publicized 1994–1996 feud with Warner Bros. Records provides a strong counterexample,[12] as does Roger McGuinn's claim, made in July 2000 before a US Senate committee, that the Byrds never received any of the royalties they had been promised for their biggest hits, "Mr. Tambourine Man" and "Turn!
[18][19] Artists who have had disputes with their labels over ownership and control of their music have included Taylor Swift,[20] Tinashe,[21] Megan Thee Stallion,[22] Kelly Clarkson,[23] Thirty Seconds to Mars,[24] Clipse,[25] Ciara,[26] JoJo,[19] Michelle Branch,[27] Kesha,[28] Kanye West,[29] Lupe Fiasco,[30] Paul McCartney,[31] and Johnny Cash.
Due to advancing technology such as the Internet, the role of labels is rapidly changing, as artists are able to freely distribute their own material through online radio, peer-to-peer file sharing such as BitTorrent, and other services, at little to no cost, but with correspondingly low financial returns.
Established artists, such as Nine Inch Nails, whose career was developed with major label backing, announced an end to their major label contracts, citing that the uncooperative nature of the recording industry with these new trends is hurting musicians, fans and the industry as a whole.
[37] Computers and internet technology led to an increase in file sharing and direct-to-fan digital distribution, causing music sales to plummet in recent years.
Atlantic's document offers a conventional cash advance to sign the artist, who would receive a royalty for sales after expenses were recouped.
With the release of the artist's first album, however, the label has an option to pay an additional $200,000 in exchange for 30 percent of the net income from all touring, merchandise, endorsements, and fan-club fees.
Depending on the ideals of the net label, music files from the artists may be downloaded free of charge or for a fee that is paid via PayPal or other online payment system.
The publisher Sony/ATV Music, for example, leveraged its connections within the Sony family to produce, record, distribute, and promote Elliott Yamin's debut album under a dormant Sony-owned imprint, rather than waiting for a deal with a proper label.
[45] In 2002, ArtistShare was founded as the Internet's first record label where the releases were directly funded by the artist's fans.