How do Record Labels Work?

DIY music distribution, digital downloads and streaming have changed the relationship between record labels and artists. Today with good music, gigging and social media grit, you can launch your own music career. Getting signed usually means you’ve already done the major legwork.

Thriving independent artist like Joey Bada$$ and Chance the Rapper prove you no longer need a record label to be a major player, BUT there are still things labels can offer you.

Today, record labels are still leaders of the key elements of the music industry, including:

A&R support and funding

Even if you’re doing well as an independent artist, you won’t have the financial clout large record labels do. They can invest in your music career, paying for the best producers, sound engineers and studios in the business. Click here to read more about A&R

Marketing and promotion

A record label can also provide exposure on a vast international scale. They can provide funding for top publicists and have influential connections in broadcasting, media and specialist advertising and PR. They can even get your added to influential playlists.

Specialist support

Record labels understand the complex administration and legalities of partnerships – and rights-based music. Their specialist teams are responsible for things like tracking, collecting and distributing royalties to their artists, producers and copyright owners.


Although labels no longer control the spread of music, they can still help their artists navigate more complex large-scale distribution for both physical retailers and digital services. Get discount on DistroKid when you sign up here.

Label deals

Record deal. Label deal. Recording contract. Call it what you want, but it all equates to a legally binding agreement between the artist and label. Under the deal, a label generally pays for making, distributing and marketing the recordings. which is what a record label does. Think of it like a loan. The label invests in your music and development, then you pay them back a set amount from your earnings.

The label also agrees to pay you a set share of money from recording sales – known as the royalty rate. 

However, before you sign any record deal, check with your lawyer – and possibly accountant – to ensure you understand all the details and financial implications of the contract. Some more information on deals here.

Licensing deals

As the composer you have licensing rights. So every time your song is played or performed publicly, whether it’s streaming, on the radio or elsewhere, you’re entitled to money – known as royalties.

It can be more common for an artist with their own label to sign with a major label.

When a record label licenses your music, they essentially purchase the rights to an album from you – and manufacture, promote and distribute it. They’ll pay you a set fee and act as your label for that album in the territory – or area that they licensed the album in.

Distribution deals

A manufacturing and distribution deal –  or M&D deal is a contractual agreement between a record label and a music distributor. Under this deal, the distributor pays for the manufacturing costs of an album from the pressing process to the printing of the labels. The distributor then recoups these costs from record sales—in addition to an agreed

pre-determined percentage of profit.

Of course, this kind of deal is becoming less relevant in the face of digital distribution.

How to get noticed by an A&R

We send our artists’ music to A&Rs around the world. Every. Single. Week. But besides joining spinnup – and creating mind-blowingly good music, there are several other things you need to do to stand out and grab an A&R’s attention (but remember, there is no set way to being signed, discovered or to get a record deal).

Know your label

If you’re asking “how to get a record deal?”, remember big labels get hundreds of demos daily. So it’s important you understand the type of artist they work with. This allows you to approach the ones that are compatible with your music.

Solid branding

You should have a recognizable brand that includes quality photos, artwork and a buzzing social media presence. Make sure your artist profiles are complete, up-to-date and include a bio, artist image and links to your social and contact info. More on promoting yourself in one of our free guides.

Be visible – on and off line

Regularly creating fresh content to share on social is a must. But make sure A&Rs can locate your music, social accounts and website easily. Your content and information matter!

Network IRL too

Besides your own gigging – also check out local unsigned nights like Sofar Sounds that hosts intimate gigs in small venues around the world. 

Be self-sufficient

Signing with a label is stepping away from being an independent artist. But don’t stop doing what got you there in the first place. In fact, labels increasingly look for self-sufficient, music dynamos that can create a buzz and gain dedicated fans using unique branding and marketing.