The music industry has grown significantly over the years from traditional local and national music markets to a global industry that generates billions of dollars annually. The role of record labels in nurturing music talents, promoting music, and securing a record deal cannot be overemphasized. To this end, it is essential to understand the extent of their control over music ownership and copyright. This blog post sets out to enlighten entrepreneurs, CEOs, and business professionals who are breaking into the music scene about the influence and limitations of record labels regarding music copyright.
A Record label is a company that manages and markets music and other artistic recordings. Record labels perform a variety of functions ranging from scouting for new artists, developing music, funding the production, distributing and promoting artists and their music. Today, some record labels operate as a subsidiary of larger music and entertainment companies, which in turn acquire copyright ownership of the music created and produced under their labels.
Usually, artists sign contracts with these record labels before releasing their music to the public. This contractual arrangement grants record labels the right to control, distribute, and promote music created by the artists. In some cases, record labels may own the entire copyright of music produced under their labels if it is stipulated in the contractual agreement. In other instances, the record labels may have partial control over the copyright while the artists retain some rights to their music.
The same ownership structure applies to royalties generated from music sold or streamed digitally. The record labels receive a percentage of the revenue generated from music sales, and this amount is shared among the artists based on their contractual agreement. When artists produce music for record labels, they are not the sole owners of the music, and any distribution or use of their music must be with the permission of the copyright owner; in this case, the record label.
However, there are instances where artists retain full control over their music copyright, or they may choose to produce their music independently without any record label involvement. In such cases, the artists have complete ownership of the copyright to their music and can decide how to distribute, market and earn revenue from it. In this digital age, artists can release their music on different platforms such as Soundcloud, YouTube, and other streaming services and retain full ownership rights.
In conclusion, record labels may own copyright to music produced under their labels depending on the contractual agreement between the artists and the label. It is essential for creatives and investors breaking into the music scene to understand that contract agreements with record labels can differ based on the level of control, ownership and rights given to the artist. Independent music artists may decide to produce and distribute their music without record label involvement and assume complete control over their copyright. Understanding the roles of record labels is an integral part of succeeding in the music industry.