In popular music, independent music, often abbreviated as indie, is a term used to describe independence from major commercial record labels and an autonomous, do-it-yourself approach to recording and publishing.
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Independent labels have a long history of promoting developments in popular music, stretching back to the post-war period in the United States, with labels such as Sun Records.[1]
In the United Kingdom during the 1950s and 1960s, the major record companies had so much power that independent labels struggled to become established. Several British producers and artists launched independent labels as outlets for their work and artists they liked, but the majority failed as commercial ventures or were swallowed up by the majors.[1]
The punk rock era saw a plethora of independent labels.[1] The UK Indie Chart was first compiled in 1980, and independent distribution became better organized from the late 1970s onwards.[2]
Internet technology allows artists to introduce their music to a potentially enormous audience at low cost without necessarily affiliating with a major recording label.[3] The design of digital music software encourages the discovery of new music. Sites with larger libraries of songs are the most successful. This, in turn, creates many opportunities for independent bands. Royalties from digital services could prove to be an important source of income. If an artist has already paid to record, manufacture, and promote their album, there is little to no additional cost for independent artists to distribute their music online.[4] Digital services offer the opportunity of exposure to new fans and the possibility of increased sales through online retailers. Artists can also release music more frequently and quickly if it is made available online. Additionally, artists have the option of releasing limited edition, out-of-print, or live material that would be too costly to produce through traditional means.
With the arrival of newer and relatively inexpensive recording devices and instruments, more individuals are able to participate in the creation of music than ever before. Studio time is extremely expensive and difficult to obtain. The result of new technology is that anyone can produce studio-quality music from their own home. Additionally, the development of new technology allows for greater experimentation with sound.[5] An artist is able to experiment without necessarily spending the money to do it in an expensive studio.
Most artists maintain their own websites as well as having a presence on sites such as Myspace.com. Technological advances such as message boards, music blogs, and social networks are also being used by independent music companies to make big advances in the business.[6] Some sites rely on audience participation to rate a band, allowing listeners to have a significant impact on the success of a band. This eliminates new talent search and development, one of the most costly areas of the music business. Other sites allow artists to upload their music and sell it at a price of their choosing. Visitors to the site can browse by genre, listen to free samples, view artist information, and purchase the tracks they want to buy.[7] Acts such as Wilco have chosen to make their new albums available for streaming before they are released.[8]
Many bands have chosen to forgo a record label and instead market and distribute their music only on the Internet. Digital marketing firms such as CDBaby, Magnatune and iTunes offer opportunities such as podcast creation and promotion and video hosting. In the case of digital distribution, musicians lend a company the right to distribute their music. The contract is often non-exclusive, and the rights to the music generally remain with the artist. The non-exclusivity of the contract allows many artists to have an online presence while continuing to sell directly through their local independent music stores.
A more recent trend is seen in artists who give their music away for free, such as Radiohead, with their 2007 album In Rainbows[9], The Go! Team with their single "Milk Crisis" and Trent Reznor of Nine Inch Nails with the 2008 album The Slip,[10] or indie artists and bands such as Happy Rhodes, whose music is available for free on the indie music site Redfizz.
Some bands choose to never go to a major label even if they are given the opportunity to do so. Similarly, others may choose to be an independent artist after having already experienced recording on a major label, such as pianist Bradley Joseph. As an independent, business is a prime concern and can take over if not controlled, Joseph said.[11] "A lot of musicians don't learn the business. You just have to be well-rounded in both areas. You have to understand publishing. You have to understand how you make money, what's in demand, what helps you make the most out of your talent."[12] But some artists just want to be involved in the music and don't like the added problems or have the personality to work with both. Joseph suggests newer artists read and study both courses and pick one that best suits their needs and wants.[11]
If a band moves to a major label, it does not necessarily guarantee the band's success. Only about 1 in 10 CDs released by major labels make any profit for the label.[13] It is possible for an artist to make more money producing and promoting their own CDs than signing with a major label. However, an independent label that is creatively productive is not necessarily financially lucrative. Independent labels are often one-or two-person operations with almost no outside assistance and run out of tiny offices.[14] This lack of resources can make it extremely difficult for a band to make revenue from sales.
Some major labels have created an opportunity for Independent artists to be features on a distributed/ marketed CD project with no strings attached in an effort to help boost awareness of the Independent Music community. Their brand of product began with and will continue as the brand picks up success most likely.
One thing an artist can consider doing if they want to be noticed by a major label is starting their own independent label. A successful independent label with a strong musical reputation can be very appealing to a major label. Major labels rely on independent labels to stay current within the ever-changing music scene.[15] Independent labels are often very good at discovering local talent and promoting specialized genres. This tactic was employed by Canadian band, Barenaked Ladies when they went from being independent to forming their own label, Desperation Records. Desperation Records only releases songs by Barenaked Ladies, and there is no intention to begin signing other artists [16]
The difference among various independent labels lies with distribution, probably the most important aspect of running a label. A major-label distributed independent label allows the independent label to find, sign, and record their own artists. The independent label has a contract with a major label for promotion and distribution. In some cases, the major label also manufactures and releases the album. Independent labels that are owned by a major label distribute their records through independent distributors but are not purely independent. A purely independent label is not affiliated with a major label in any way. Their records are distributed through independent distributors.[17]
It can be very difficult for indie bands to sign on a record label that may not be familiar with their specific style. It can take years of dedicated effort, self-promotion, and rejections before landing a contract with either an independent or major record label. Bands that are ready to go this route need to be sure they are prepared both in terms of the music they offer as well as their realistic expectations for success[18]
The three main ways for an artist to make money are record deals, touring, and publishing rights.
Most major label artists earn a 10-15% royalty rate. However, before a band is able to receive any of their royalties, they must clear their label for all of their debts, known as recoupable expenses. These expenses arise from the cost of such things as album packaging and artwork, tour support, and video production. An additional part of the recoupable expenses are the artist's advance. An advance is like a loan. It allows the artist to have money to live and record with until their record is released. However, before they can gain any royalties, the advance must be paid back in full to the record label. Since only the most successful artists recoup production and marketing costs, an unsuccessful artist's debt carries over to their next album, meaning that they see little to no royalties.
Major label advances are generally much larger than independent labels can offer. If an independent label is able to offer an advance, it will most like be somewhere in the range of $5,000-$125,000. On the other hand, major labels are able to offer artists advances in the range of $150,000-$300,000. Instead of offering an advance, some independent labels agree to pay for a certain amount of the artist's recording costs. This money is recoupable. There are advantages and disadvantages of an advance. If an artist gets no advance, that means they owe their record company less money, thus allowing them to earn royalties more quickly. However, since the label recoups so many costs, an artist's advance might be the only money they are able to make for quite some time.[19]
In a contract, options are agreed upon. Options allow the label to renew their contract with the artist and release more of their albums. Options lie with the label, and the label has the choice whether or not to record more with the artist. Some artists consider this unfair because the label has the right to not distribute an artist's project and extend their contract by one more album if they deem the music as commercially or artistically unacceptable. Record labels effectively own the artist's product for the duration of their contract.[20]
Many times, a deal from an independent label is quite similar to that of a major label. In cases where an independent label is distributed by a major label, the independent label itself will have to have a major-label deal. In this case, the independent label would want to be sure that their contract with their artists covers the same issues as the independent's own contract with the major label. In other cases, independent labels offer similar contracts to major labels because they want to look more professional. An independent label that thinks it will eventually be dealing frequently with major labels will have a similar contract in order to avoid having to redraft contracts in the future. There are also plenty of cases in which independent labels have contracts that do not resemble major label contracts in any way. In general, independent labels that are not affiliated with a major label are more willing to take chances and are able to be more flexible in their deals.
Though some independent labels offer a royalty rate of 10-15% like the major labels, it is becoming increasingly more common for independent labels to offer a profit-sharing deal in which as much as 40-75% of the net profits go to the artist. In this type of contract, the net gain after all expenses have been taken out are split between the label and artist by a negotiated percentage. However, deals in this form can take longer for an artist to gain any profits since all expenses – such as manufacturing, publicity, and marketing – are also taken into account. As an independent artist becomes more popular, deals of this type are more advantageous.
Independent labels often rely heavily on free goods, or the records that are given away in promotion of an album. Artists do not receive royalties on merchandise that is given away for free. Additionally, since compilations made by independent labels are often given away, the artist receives no royalties. Major label compilations are more often sold than given away, and the artist does receive royalties.
When a band goes on tour, it may or may not have the financial backing of its label. An artist receives a fixed fee or a percentage of the tickets sold by the venue owner or promoter. Touring is an expensive process. A moderate estimate of touring costs with a bus and small crew can easily reach $20,000 a week. If an artist tours with the support of their label, the expenses are all recoupable, thus potentially increasing a band's debt. Many successful bands tour without the support of their label so that they can keep all of their touring revenue. An independent band would have more difficulty than a highly successful one in being self-sufficient on tour.
If a band or artist writes their own material, publishing can be one of the best ways to earn a profit. It is one of the few guaranteed ways to earn revenue for artists. Even touring is not a sure way to make money because it is possible that no one will attend the shows. Basic copyright law protects songwriters by giving them exclusive rights to grant or deny the reproduction, distribution, or performance of their work. The majority of a band's publishing income comes from its mechanical and performance rights. Mechanical rights cover the reproduction of a song on a record. In the standard contract between a band and a label, the label is required by law to pay the composer a fixed rate per song simply for the right to use the composition on commercially sold recordings. The mechanical licensing rate in 2006 for the U.S. and Canada is 9.1 cents per song.[21] With the performance rights, a song's copyright covers every time it appears on radio and television.
If an artist prefers to receive up-front money for their songs instead of waiting for the money to come in over time, it can choose to assign its copyright to a music publisher. The music publisher pays a cash advance for what they decide is the value of the copyright. It is common for a band to sign a copublishing deal. This means that the publisher offers the artist an advance in exchange for half the publishing income. When the advance is paid back, the music publisher retains 25% of the income. Since an artist has no guarantees whether or not their song will be popular, some may prefer to have a cash advance that guarantees them money regardless of how well the song does.
Increasingly the internet is making new methods of publication accessible to independent musicians. Services have been set up to distribute independent music over the internet with many different types of payment models. This often allows artists to reach a much wider audience then would normally be possible as a local band. [22]
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