In the beginning, every label was an indie. At the turn of the 20th century, as phonographs became household staples, companies like Columbia and Victor began slapping labels on the center of their shellac discs, marking the birth of the record label and the beginnings of the recorded music business. As technology evolved -- Columbia introduced the 33 rpm LP in 1948, RCA Victor the 45 rpm in 1949 -- the business grew into a global operation of superstar artists -- and, eventually, executives -- of all kinds.
By the time rock’n’roll caught fire, the record industry was booming, with companies like EMI, Decca, RCA and Columbia snapping up smaller companies and launching genre-specific imprints, introducing the concept of the major label. And record label functions expanded: Content owners with marketing wings added departments for A&R, promotions and publicity.
The 1960s and ’70s saw the rise of new, visionary executives with artist-friendly independent labels that would shape the modern music business. Ahmet Ertegun’s Atlantic, Chris Blackwell’s Island, Berry Gordy’s Motown and Warner Bros. Records under Mo Ostin helped create a new paradigm where artists were valued for more than just their earning potential.
When Sony and Phillips released the first CDs in 1983, the recorded-music business exploded, with U.S. revenue nearly quadrupling from $3.8 billion in 1983 to a record high of $14.6 billion in 1999, according to the RIAA. The boom brought forth new players like Interscope, Universal Republic and Def Jam, while consolidation created megacompanies like Sony, BMG, Warner Music Group, EMI, Polygram and MCA (the latter two of which merged into Universal Music Group in 1998) that cornered large swaths of the market.
It all crashed at the turn of the 21st century with the arrival of Napster, iTunes and the digital revolution. U.S. revenues bottomed out at $7.1 billion in 2014 as companies scrambled to stem the bleeding. Again, the industry consolidated, from five major labels to four, then to three in 2012 as EMI was carved up and sold. Imprints shuttered, indies struggled for survival, layoffs gutted companies, and the remaining major labels -- Universal, Sony and Warner -- looked for new revenue streams, leading to the “360 deal,” where labels took a cut from artists’ touring and merchandise income.
Today, streaming has led to new hope, as revenue rises again. Marketing, promotions and sales divisions have gone digital, while playlists have grown to rival radio in importance. Streaming has provided a path for indies to rise again and even for artists to eschew the label system altogether. The majors continue to run an increasingly global business that is still in recovery, but there’s more room for others to find a niche -- and for labels to chart a new path into the future. -- DAN RYS