How Record Labels Are Setup

There is a lot of work involved with running a record label: signing, recording, promoting, publicizing, and selling music. The following introduction to the way major labels and independent labels setup the business of music marketing is broken down by departments. As you will see, the larger record labels have the luxury of having many different departments and dozens of employees to carry out the many responsibilities involved in running a label. And, the smaller companies, that have the same work to do, have to be quite creative and energetic to get all that work done.

Major Label Departments:

What are the key departments at a record label, and what are those departments responsible for? Let’s take a look.

For starters, the CEO of a major label will generally oversee the business affairs of all the affiliated labels under their corporate umbrella. Each major label will have its own President who is responsible for all the label activities. For example, at Warner Brothers, there is a president for Warner Brothers Records, a president for Reprise Records, a president of Atlantic Records, etc.

Every department at a major label is usually run by a Senior Vice President, in charge of one of the following:
The Business Affairs Department takes care of label finances; bookkeeping, payroll, et al.
The Legal Department handles all contractual issues and other legal responsibilities.
The A&R (Artists and Repertoire) Department locates and signs new talent. They work with the artist in song selection, choice of producers, recording studio selection and they communicate with the label’s Business Affairs Department to make sure all the paperwork and accounting issues involved with the actual recording of an act’s record are setup properly. In short, The A&R Department can serve as a liaison between an artist and all the other departments at the label.
The Art Department supervises all product design jobs, (CD, Tape, Vinyl cover art etc), trade and consumer press advertising, retail sales posters and flats, and other needs of the print media.
The Marketing Department is responsible for creating the overall marketing plan for every record the label is releasing. They are also involved in coordinating all the promotion, publicity, and sales campaigns that the label is committed to.
The Publicity Department arranges for any feature stories, interviews, or record reviews in local and national newspapers, magazines, web-zines, as well as the broadcast opportunities for such coverage on radio stations and television. They may also co-ordinate any of these publicity opportunities with an artist’s own Publicist.
The New Media Department produces and promotes the music videos for the label’s artists that are shown on MTV, VHl, etc. This department also oversees some promotions and marketing opportunities on the Internet that use the audio and video technologies available from online hardware and software sites that support music..
The Artist Development Department usually oversees the career planning of artists signed to the label. This department coordinates a consistent marketing and promotion presence for an artist throughout their career with the record label. The Artist Development Department has changed over the last decade. Many labels no longer have such a department. Others have changed the name to Product Development and concentrate more on “breaking,” or promoting artists quickly in order to try to speed up the return on their financial investment. The pressure to return a profit to shareholders has changed the face of the music business dramatically in recent years, so the emphasis has been more on Product Development, and securing a hit as fast as possible.
The Sales Department oversees all the retail activities of the label, and concentrates on building relationships with the key record store chains and other mass-market retailers. The Sales staff coordinate their efforts with the major label’s distribution company, as well as communicating regularly with the Promotion and Publicity departments at the label.
The Label Liaison is the person who coordinates the business of the major label’s distribution company with the needs of their parent record labels. Street dates, (the date that a new release goes on sale at music retailers), must be approved by the label’s distribution company
The Promotion Department’s primary goal is secure radio airplay for their company’s new releases. Their ability to get songs played on the radio is central to the success of the whole company. The Promotion department is closely connected to and constantly communicating with other departments within the label to make sure that all strategies being used to market and sell an artist’s record are working together properly. Soliciting videos to MTV, VH1, BET and other music oriented television networks and programs may also be the responsibility of this department. At some labels this job is a separate department, or part of the New Media department.

Every department at a record label plays an essential role in the success or failure of the company. They are team members, working together toward the goal of selling their records, cassettes and CDs as one lean, mean machine.

Inside an Independent Record Label

Independent record labels come in all sizes and shapes. The large, well-funded indie labels are organized by departments much like the major label operations described above. The more money a label has the more they people they can hire to handle the various responsibilities of a label. Smaller, grass roots or garage labels organize the work of promoting, selling and publicizing their releases by wearing as many different hats as they can. These smaller labels have an awesome task marketing their records because there may be only two or three employees, including the label owner, doing the A&R scouting, calling radio stations about airplay, working with a distributor (if they even have one), checking with the music retailers, and coordinating the publicity efforts, as well as dealing directly with their artists and bands helping them find gigs and put tours together.

Running a record label is a very expensive and time-consuming job. One of reasons so few independent labels succeed is related to the issues I have just outlined. It takes a lot of money, and a lot of time to operate a legitimate record label. The more research and planning a young label does before jumping into the world of music marketing, the higher the likelihood that they will survive, and perhaps even prosper in a very competitive business.