Three Things Major Record Labels Must Do to SURVIVE!

Music is fruit for the soul. Music remains a significant part of life for
many individuals.  The corporatization of music and artists came into
existence in America in the early 20th century with the advent of radio.
Record labels began to form from the creation of sound recordings and
radio. Record labels created the means for artists to get their creative
work to the masses. This created a music industry and billions of profits
over the last century.  Unfortunately, the music industry of today is faced
with suffering sales, low innovation and mediocre artistry.  Much of this
demise of the music business is centered on the major record labels
reluctance to adapt to obvious trends and resistance to changing their

My motto “Indie is the New Major” speaks volumes today. Independent labels
are sprouting up all over the place with a focus on “Indie” thinking. Time
for the Major Record Label to change! The major record label must focus on
re-inventing itself for the future. A reinvention must happen internally by
radically changing their business model. Can transformational change happen
within major record labels? The short answer is yes. There is hope.
However, leadership within these dynamic and often complex organizational
structures must be willing to accept their current status of internal
failure and create a new vision. A vision that will bring about the type of
change needed to sustain in this technologically, digitally geared music
environment. I’m going to state some very far-fetched and radical ideas but
somebody has to take a stand. The change that must take place for record
labels to be successful must focus on three areas. They are the Culture,
the Deal and the Process.

1. Change the Culture:

Culture can be defined as the value, beliefs, rituals and ideology which characterize the internal environment of an organization. For many record labels, the internal culture directly affects the artists’ ability to succeed.  Culture in record labels is driven by the leaders and staff. The direction, vision, communication level, loyalty towards artists and recording process can be affected by the type of culture a record label displays. Some record labels need to change their mental framework. Currently, many major record companies have a “profit over artistry” mentality which directly affects the type of artists they sign, the level of productivity of their staff and the support given to artist. The “profit over artistry” mentality is a toxic mental state. Does this sound unrealistic? No!
2. Change the Recording Contract:

The recording contract is the deal that artists sign which enters them into a legal binding agreement with record labels. I have seen the same contract from the last 15 years used on multiple artists. How can this be? Recording contracts are lengthy, cumbersome, inadequate and full of irrelevant information. A new
contractual foundation will radically change the way record labels do business. The deal must be structured so that both parties benefit. It should reduce costs and encourage artistry.  In order for record labels to
sustain and survive, they must change key parts of the recording contract.First, all new artists should sign digital deals only. This will reduce expenses and minimize risk for both parties. Second, record deals should
state a specific dollar amount for marketing, promotion and tour support. This is VITAL! Also, artist development should be reinstated within major record labels. Artist development is non- existent. We need it back. Artist development is vital to reducing costs, eliminating waste and lowering the
time spent recording a new album. Recording caps should be used for each artist as well.

3. Change the Process:

The process at the majors is to complex. The internal workings of major record labels are old and malfunctioning. First, the process of maintaining multiple artists on the record labels roster
must be transformed. Record companies must release artists immediately if they are not reaching realistic goals. The proper amount of support must be given to each artist before releasing unsuccessful acts.  Second, change the recording process. What I say next will shock the world.  Create recording caps ranging from $35,000 to $75,000 and reduce unnecessary spending. This is possible. The financial processes within record labels are in an abysmal state. Here’s another shocker! All artists and their management should be able to track expenses and charges made on the behalf of the artist. An online database and tracking system should be instituted to eliminate waste and fraudulent activities. This establishes trust. Third, define the vision of the project and develop a marketing plan before the recording process. I’m sure you are thinking “Hey wait they do this” but unfortunately this isn’t always done prior to recording. This will create more cohesion and consistency for each project. It will reduce costs greatly and streamlines an already cumbersome process.

Record labels must understand that their role is changing. New, innovative and financially sound methods must replace the old and outdated routines and practices. Therefore, record labels should create higher standards and newer thinking. Encouraging artistry over profit is a major start and a significant foundation for success. Music is fruit for the soul and serves as a major role in everyone’s lives. Preserving the foundation that distributes music is vital not only to the music industry but to mankind.

At the end of the day, I’m an advocate for the Independent Record Label
model but I do understand the Major Label is still relevant and needed.

Yours Truly,

Dr.Syleecia Thompson
DYG Management Group
“Define Your Greatness”