Everyone knows that the music industry has changed dramatically over the past few decades. And if you weren’t around to witness the shift, keep reading for a full breakdown of how things have evolved. 

What was once a label-driven industry with tight control over distribution, marketing, and artist development, today’s scene is radically different, shaped more by streaming, social media, and creator-first tools. For independent artists, understanding how labels operated “back then” compared to what they offer today isn’t just interesting trivia, it’s to better strategize.  This knowledge can help you decide whether to continue building independently or consider aligning with a label based on your goals.

In this post, we’ll go into what record labels actually do, how their role has changed, and what that means for you as an artist navigating today’s music landscape.

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What is a record label? 

Starting with the basics, at its core, a record label is a company that helps artists produce, distribute, and market their music. There are two main types:

• Major Labels: These are big corporations like Universal Music Group, Sony Music Entertainment, and Warner Music Group, each with many sub-labels under them. They often control everything in-house from production and distribution, to publishing, sync, marketing, and everything else. 

• Independent Labels (Indie Labels): These operate without the backing of the major three, in some cases leading to smaller budgets and teams. Indies can tend to be more flexible and artist-friendly, often outsourcing services like distribution or publishing while maintaining creative freedom.

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Why do artists need record labels? 

Historically, artists needed record labels for handling things like:

• Studio recording budgets
• Manufacturing physical records
• Distribution to stores
• Radio and press promotion
• Tour and merchandising support

Today, that’s changed and many of these services are now available to artists directly through tools like:

• Promotion platforms, like Songtools, helping with playlisting and digital ads 
• Digital distributors (e.g. Symphonic)
• Analytics tools for audience and data insights
• Affordable home studio gear

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How do record labels benefit (or limit) independent artists now? 

Labels can amplify your reach but may also limit your freedom. Contracts can be complex and long-term. You might lose ownership of your masters or have to give up a big percentage of revenue. However, it’s important to note that these risks are more likely to happen when you’re dealing with a major label. 

In contrast, staying independent means:

• Full creative and business control
• Higher income share (though more responsibility)
• Freedom to pivot quickly in your career

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Then vs. Now for Record Labels

Now that we’ve looked at how record labels have traditionally supported artists and played a major role in launching careers, let’s explore how the landscape has shifted, and how those same benefits (or drawbacks) might look very different today:

Distribution:

• Then: Music was almost exclusively sold in physical formats, vinyl, cassettes, and CDs, through retail stores. Distribution required manufacturing, shipping, and shelf space.
• Now: Most music is distributed digitally via streaming platforms like Spotify, Apple Music, and YouTube. Artists can upload songs from their bedroom, or easily find someone who will do it for them. 

Artist Discovery:

• Then: Labels relied on A&R (Artist & Repertoire) scouts to attend live shows or sift through demo tapes.
• Now: Online discovery has been prioritized, from YouTube content to TikTok trends, Instagram reels, and standout streaming data. A single viral moment can quickly put you on a label’s radar, and sometimes, that’s all it takes.

Marketing & Promotion:

• Then: Labels ran big-budget campaigns for radio, TV, print ads, and traditional media.
• Now: Social media and short-form video are king, and artists no longer need massive budgets to make noise. Songtools helps independent artists AND labels promote their music with playlisting and digital ads, so they can focus on creating while we handle the growth. Whether you're a solo act or managing a roster, we’ve built tools and services to power your release strategy from the ground up.

Music Ownership:

• Then: Labels typically owned the masters, controlling how music was used and monetized.
• Now: Many independent artists keep full ownership of their masters and publishing, often choosing deals that allow for more flexibility and long-term gain. Click here to learn even more about collecting your royalties as an indie artist. 

Revenue Streams:

• Then: Artists made the majority of their money through physical album sales and touring.
• Now: Revenue comes from a mix of streams including: sync deals, brand partnerships, merch, along with the traditional sources like touring and album sales. 

Barriers to Entry:

• Then: Releasing music professionally required big budgets, studio time, and gatekeeper approval.
• Now: Artists can produce, release, and promote music with affordable gear, accessible tools, and no need for permission.

Data & Feedback:

• Then: Artists and labels had to wait for sales charts and radio feedback to assess how successful their release was. 
• Now: Data is instantly accessible through platforms like Spotify for Artists or Chartmetric, and even through the “Artist Growth Radar” directly within your Songtools dashboard. Now, artists can make smart, real-time decisions if they stay on top of their stats. (Click here to learn more about how to read your data on Songtools). 

Industry Gatekeeping:

• Then: The power was truly only in the hands of a few powerful label execs which had all the control in deciding which artists broke into the mainstream. 
• Now: While major labels still influence the spotlight, it's not exclusively up to them anymore. With the right strategy and support, any artist with talent can build momentum, find their audience, and grow from the ground up (and that’s exactly what Songtools is here to help you do). Today, it’s not about waiting to be discovered, it’s about showing up and being seen.

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Key Takeaways

• Record labels aren’t one-size-fits-all. Some indie artists thrive with them, while others prefer to stay fully independent.
• Major labels still offer value, especially in scale, resources, and industry access.
• Tech has leveled the playing field, so now indie artists can do their own distribution, marketing, and data analysis.
• Ownership matters. Keeping your masters and rights can mean long-term financial freedom.
• Know your goals. Choose partnerships (or independence) based on your career vision, not outdated norms.

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FAQ’s

Q: Do I need a record label to get on Spotify or Apple Music?

A: No! You can use digital distributors like DistroKid, Symphonic, or TuneCore to upload music directly.

Q: What’s the difference between a label and a distributor?

A: A distributor gets your music to platforms. A label may do that plus offer funding, marketing, and strategy, but often takes a cut of your profits.

Q: Should I sign with an indie label or stay 100% independent?

A: It depends on your goals. Indie labels can offer support and structure, while going fully independent gives you total control, which also means taking on all the work and responsibility to grow your career.

Q: Can I grow a successful music career without ever signing to a record label?

A: Absolutely. Many independent artists today are building thriving careers on their own terms, using tools like digital distribution, social media, and platforms like Songtools to handle promotion and reach new fans (Click here to check out all of our artist success stories). Labels can be helpful, but they’re no longer the only path to success.

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For independent artists, understanding the shifting role of record labels is crucial. Whether you're aiming for a major deal, eyeing an indie label, or forging your own path, you need to know what you're getting into, and ultimately what you're giving up. 

The music industry is more accessible than ever, but this also means it has become more complex. However, understanding how the system works puts the power back in your hands, and this is the first step toward building a career on your own terms.

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Photo by Nick Hillier on Unsplash