New Role for Record Labels

Two rappers are providing a glimpse into the changing landscape of the role of the record labels. In the past, record labels would try to find bands that were just on the verge of breaking and making it big. They would bankroll the album and provide initial funds for touring.

Now, it seems that labels are looking more for artists who are already matured with a fan base. The labels then come alongside the artist and offer to push them along. One big difference is money – labels don’t have much and therefore can’t bankroll albums and tours. And another difference is the digital media revolution that allows artists to accomplish tasks formerly reserved for the record labels (recording, gathering a fan base, etc.)

This is true of two rappers that have started to make it big through grassroots online networking and marketing. The first rapper, named Drake, currently has the #2 song on Mediabase’s Urban chart and the #3 hit on Hit-Rhythmic, all without the backing of a major label. The other rapper, Kid Cudi, has the #6 song on Hit-Rhythmic, “Day ‘N’ Nite” and is about to sign with Universal Motown. “Day ‘N’ Nite” has had over 44 million plays on MySpace. Once popular online, both rappers were fought over by the labels.

My further question to all of this is why these guys then decide to sign with the labels. They gathered a following online, which allowed them to begin touring and making guest appearances with big acts. What do the record labels come in with that attracts these guys? Obviously money, but what are they offering that these guys can’t do on their own? They certainly can’t promise loads of money from record sales. Perhaps they can offer help in touring and merchandise. But, then it seems that a Live Show production company like Live Nation would be better suited for this role.

Stay tuned,
Erik
erikrostad.com
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