The main difference between a Music Production Company and a Record Label is that a record label specializes in marketing and distributing music. In contrast, a production company specializes in creating and producing music.
Differences Between Music Production Companies And Record Labels
A music producer isn’t always what you think it is; sometimes, they’re also the artist.
However, a music producer doesn’t have to be in the spotlight to make a massive difference in someone else’s career and music production value.
Today, we’re going to explore the differences between music production companies and record labels so you can choose which fits your goals best.
What Is A Record Label?
A record label specializes in manufacturing, promoting, and distributing sound recordings.
There are two broad types of record labels: “Major” and “Independent.”
Majors are any record label that controls >5% of the global market value.
One example is Universal Music Group, which owns a wide range of labels such as Capitol Records, Def Jam Records, Interscope Records, Universal Studios, etc.
Another is Sony Music Entertainment, which has labels like Columbia Records and Sony BMG.
These big-named record labels have some advantages over smaller ones because they can afford to take more risks with new artists.
For example, they can sign an artist and give them more attention than a smaller company can provide.
These companies also have deep pockets to spend on radio promotion and advertising for their artists.
Additionally, these larger companies have connections with each other and know how to use marketing channels better.
That being said, many people prefer to work with independent labels because it allows them more freedom to create a different vision for their musical creations.
Furthermore, major record labels are often criticized for only signing those who fit into specific criteria (e.g., look good) and not taking chances on other artists who might be creative or talented but not necessarily look perfect.
What Is The Role Of A Record Label?
Traditionally, record labels provide an artist with funding for their projects, marketing of albums and merchandise, press and media coverage, digital and physical media distribution, and a steady stream of royalty payments.
In exchange for this, the artist gives up ownership of their composition and grants all rights to the record label.
At that point, the artist no longer has any control over what was once theirs since the record company is now the legal owner.
It is in the record label’s best interest to generate as much revenue as possible; in this regard, it is a win/win situation since the artist gets a percentage.
However, most people have ideals and beliefs, some of which we hold higher than any amount of money could ever be worth. And this is where things start to get sticky because a record label will generally disregard these ideals if the price is right.
Let’s say, for example, you are vegan and care deeply about the mistreatment of animals throughout the dairy and produce industry.
I imagine that if it were your choice in this situation, you probably wouldn’t want your song used in a commercial to promote some fast food chain.
But if you signed to a record label, you may not have a say.
To be clear, I’m not saying that record labels are unfair. I want to make sure that you consider all the implications of such an agreement.
Do Record Labels Produce Music?
Record labels are generally not in the music production business. They are a marketing, promotion, and distribution channel for artists to get their music out into the world.
If you want to be involved in the actual production of music, consider starting a Music Production company.
These days the word record label is sometimes used interchangeably with music production company. Still, the difference is that a music production company produces all aspects of an artist’s sound, including songwriting, arrangement, mixing, mastering, etc.
A record label often only handles promotions and media management.
In short, if you’re interested in having your songs produced and need help getting them heard by listeners, then a music production company is a better option for you than a record label.
On the other hand, if you want to find an established name behind your album or EP that has built-in connections with publishers, distributors, festivals, TV networks, and radio stations –then a record label is just what you need!
What Is A Production Company?
A production company is a business that specializes in the services of music production.
These companies are responsible for the engineering, mixing, and mastering music, as well as for creating soundtracks for films and advertisements.
A production company can also offer services such as audio-for-video editing, CD/DVD duplication, web design, and animation.
They often employ musicians or engineers to produce tracks on an album or score a film or commercial.
The more famous ones usually have their own studios that they use to make all this possible.
Becoming part of one of these companies will most likely need formal training and industry experience.
There are smaller-scale production houses that may not require formal education. However, they still need someone with experience who has been involved with various genres like Pop, Rock, Hip-Hop, etc.
Sometimes you may be required to sign an agreement before joining the company, so it’s essential to read through it beforehand.
What Is The Role Of A Production Company?
A production company is a business that helps bring an artist’s vision to fruition.
A production company will help artists create their music by providing creative direction, a professional studio, recording equipment, mixing & mastering engineers, etc.
There are different levels of involvement and investment regarding the production company’s role. They can be involved from conception through distribution or in one area, such as mixing or mastering.
Artists who partner with a production company for their project often have more control over their sound than if they went solo.
Often, these companies act as an extension of the artist’s team, working together on what aspects need attention or improvement.
What Are The Differences Between A Record Label And A Production Company?
A music production company is a company that offers services in the field of audio and video production, such as recording, mixing, editing, or mastering.
Music production companies usually only offer these services to artists signed with a record label.
A record label is a business specializing in developing and marketing sound recordings. They do not create the sound recordings themselves but instead sign agreements with music producers and artists to produce them for release on the label’s behalf.
A record label’s success depends heavily on its artists’ success. For example, suppose one artist becomes popular while another doesn’t. In that case, the first artist will be more profitable than the second.
One way this can happen is by backing up an artist with another well-known artist. For example, having Drake collaborate with Rihanna would make him more marketable because people would know him better and enjoy his music more.
The same goes for releasing songs from Beyoncé written by other singers.
Both methods work similarly by boosting the popularity of two artists at once.
Is A Producer The Same As A Record Label?
The difference between a producer and a record label is that the producer will help to make and produce your music.
In contrast, the record label will promote and distribute your music.
If a producer is doing business that is exchanging their time and usually skills for money, then they are a production company.
Many people think that because they don’t have employees and /or did not file any paperwork, they are not a company, but this is not true.
In this case, your company would be classified as a “Sole Proprietorship.”
The production company helps you create the sound of your music, while the record label helps to promote it.
It’s important to remember these two different companies when trying to find the right fit for yourself as an artist.
A production company will often charge an upfront fee for all their services, whereas a record label might only sometimes require payment upfront.
A producer may offer a contract with a share in the song’s royalties. In contrast, most labels require full ownership of the song.
What Is The Difference Between Record Deals And Music Publishing Deals?
A record deal and a publishing deal are two different things.
A record deal is when a label pays for the rights to distribute, manufacture, promote, and sell an artist’s music.
This can be done by giving the artist a one-time payment or royalties for ownership of the album.
Both companies specialize in the marketing and promotion side of things, but to understand the main difference between the two, we first need to understand something called intellectual property.
Intellectual property is a set of laws in the US that grants ownership rights over ideas and concepts that don’t exist in a physical form.
As a musician, it is common for your work to exist in 2 distinct mediums.
When you write an original song or compose a piece of original music, the composition as it exists as an idea in your intellectual property and is protected by copyright (referred to as the composition).
Congrats, you are now a songwriter.
Then at some point down the road, if you get that same composition and record it to a physical media like vinyl or cd, you now own a second copyright to the physical recording (often called the master or sound recording).
Congrats, you are now an artist.
The difference is that record labels deal primarily with the master, while music publishers deal with only the composition.
In other words, the significant difference is that publishers profit from the writer. In contrast, record labels make their profit off of the artist.
So if you want to get into either industry, it’s essential to understand how each side operates so you know what kind of work you would be best at.
One company might be more willing than the other to do business with your connections. Still, once again, it all depends on what you’re looking for in your career.
Can A Production Company Be A Record Label?
A music production company typically offers services such as mixing, mastering, vocal editing, and studio rentals.
On the other hand, a record label offers marketing and music product distribution to retailers and wholesalers.
Although a production company may offer some of the same services as a record label, they are not the same.
So What Does This Mean For You?
It means you must understand how each can help your career before deciding the best for you.
The first question you should ask yourself is, do I want to focus more on creating my own sound, or do I want someone else handling it?
If you want someone else handling it, then a production company might be a better choice because they will guide you in developing your sound.
However, a record label might be a better option if you prefer to handle the bulk of the work.
The key is making sure you know what precisely both companies offer so that you can make an informed decision about which one will best fit into your plan.
Do Record Labels Hire Music Producers?
Yes, sometimes record labels will contract producers to work with the artists that the label represents.
How Do You Start a Music Production Company?
The easiest way is to start offering music production services as a freelancer on a site like Fiver.com.
But to fully establish your production company, you will probably want to consider getting incorporated, hiring employees, purchasing the necessary equipment, building business relationships, Reaching out to artists, working with a marketing agency, Building a company website, and trademarking your assets, among other things.
Do Record Labels Pay Artists?
It is common for labels to pay artists a royalty payment calculated as a percentage of each sale.
How Do You Register a Music Company?
The process will be a bit different depending on your business structure. Still, it generally involves hiring a legal representative, filling out the necessary state and federal paperwork, and paying applicable fees for state and local business licenses and permits.
There are also companies such as stripe.com that, for a fee, will help you get your business registered.
How Much Does It Cost to Start a Music Production Company?
A sole proprietorship can be formed without paperwork or fees, while an LLC can range between $100 and $400.
However, this only considers everyday business expenses such as an office lease, equipment, contractors, marketing, legal aid, etc., which can collectively raise the startup costs by several thousands of dollars.
Do You Have to Play Instruments to Be a Music Producer?
While this might be true for some producers, it is common for producers not to play physical instruments.
How Do You Start a Record Label with No Money?
One way or another, you will need funding. This can come from a personal loan, angel investors, or crowdfunding.
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